Central excise valuation excludes government subsidy where it is not additional consideration and does not reduce the selling price.

A subsidy received under the Rajasthan Investment Promotion Scheme, 2010 was not includible in the assessable value for central excise because it did not operate as additional consideration for the sale and did not depress the selling price of the goods. The related sales tax collected from buyers was passed on in accordance with the scheme, so the subsidy could not be brought into transaction value under section 4 of the Central Excise Act, 1944. The precedent in Super Synotex India was held inapplicable on those facts, and the demand was not sustainable.

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Issues: Whether the subsidy received under the Rajasthan Investment Promotion Scheme, 2010 was includible in the assessable value of the goods for central excise duty, and whether it constituted an additional consideration under section 4 of the Central Excise Act, 1944.

Analysis: The reference decision in the connected matter had already determined that the subsidy under the promotion policy did not reduce the selling price, did not amount to an additional consideration, and did not affect the selling price of the goods. It further held that the entire sales tax collected from buyers was paid over in accordance with the scheme, and therefore the subsidy amount could not be brought into the transaction value for levy of central excise duty under section 4. The precedent in Super Synotex India was found inapplicable on those facts.

Conclusion: The subsidy amount was not includible in the assessable value and the demand could not be sustained.

Ratio Decidendi: A subsidy received from the Government under a promotion policy is not part of the transaction value for central excise if it does not constitute an additional consideration for the sale and does not depress the selling price of the goods.

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