Subsidy under a state investment scheme is excluded from excise transaction value where it is not additional sale consideration.

Subsidy received under the Rajasthan Investment Promotion Scheme, 2010 was held not to form part of the assessable value for central excise duty under section 4 of the Central Excise Act, 1944. The Tribunal's earlier reference answer found that the subsidy did not reduce the selling price, was not additional sale consideration, and did not affect the transaction value, and the facts were not governed by Super Synotex India. On that basis, the challenge to inclusion of the subsidy in valuation failed, the duty demand was set aside, and the appeal was allowed.

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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 cleared during the relevant period for levy of central excise duty.

Analysis: The reference answered earlier by the Tribunal had held that the subsidy did not reduce the selling price, was not an additional consideration, and did not affect the selling price of the goods. It was also held that the facts were not governed by Super Synotex India and that the subsidy amount could not be included in the transaction value for the purpose of central excise duty under section 4 of the Central Excise Act, 1944. In light of that binding answer to the reference, the challenge to inclusion of subsidy in assessable value could not survive.

Conclusion: The subsidy was not includible in the assessable value and the issue was answered in favour of the assessee.

Final Conclusion: The order confirming duty demand was set aside and the appeal was allowed.

Ratio Decidendi: A subsidy granted under a State promotion scheme, where the entire sales tax collected from buyers is paid and the subsidy does not operate as an additional sale consideration, is not includible in the transaction value for central excise valuation.

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