Subsidy under investment promotion policy excluded from assessable value when unrelated to sale price and buyer consideration.

A government subsidy granted under an investment promotion policy, based on capital investment and employment generation, was not treated as additional consideration because it was not linked to the price charged from buyers and did not depress the selling price of the goods. The controversy was distinguished from Super Synotex India, and Section 9 of the Rajasthan VAT Act, 2003 was held inapplicable to the issue. On that basis, the subsidy was excluded from the assessable value, and the foundation for the duty demand failed.

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Issues: Whether subsidy received under the Rajasthan Investment Promotion Policy, 2003 was liable to be included in the assessable value as additional consideration and whether the demands confirmed on that basis could survive.

Analysis: The subsidy was granted under the promotion policy on the basis of capital investment and employment generation and was not shown to be linked to the price charged from buyers. The amount was not an additional sales consideration and did not reduce or depress the selling price of the goods. The factual matrix was held to be different from the situation dealt with in Super Synotex India, and Section 9 of the Rajasthan VAT Act, 2003 was held to have no application to the controversy. Once the subsidy was not includible in the assessable value, the foundation for the duty demand failed.

Conclusion: The subsidy was not includible in the assessable value as additional consideration, and the duty demands and connected orders could not be sustained.

Final Conclusion: The appeals succeeded and the impugned orders were set aside, with the dispute decided in favour of the appellants.

Ratio Decidendi: A government subsidy granted under an investment promotion policy, when not linked to the sale price and not constituting flow of consideration from the buyer, does not form part of the assessable value for central excise purposes.

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