2018 (4) TMI 1160

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....ute is July, 2011 to December, 2013. 2. The appellant is engaged in the manufacture of scooters and Motorcycles and their factory situated in Alwar, in the state of Rajasthan. The appellant entered into a Memorandum of Understanding dated 11.5.2010 with the State of Rajasthan in terms of which the State Government offered them a customized package of incentives and facilities for setting up of their scooter plant in their State. As per the MOU, the State Government shall pay the appellant cash subsidy equivalent to 100% of the output tax in respect of sale and registration of vehicles manufactured by the appellant in the State. MOU also provides for the CST amount paid on inter-state sale. The appellant paid VAT and received subsidy from....

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....n support, he relied on the following decisions : 1. Shree Cement Ltd. vs. CCE, Alwar Final Order No. 50189-50191/2018 dated 18.1.2018; 2. Ultratech Cement Ltd. vs. CCE, Jaipur Final Order No. 50391/2018 dated 25.1.2018; 3. CCE Mumbai I vs Welspun Corporation Ltd. [2017-TIOL-1287-CESTAT-Mum] 5 Learned DR justified the impugned order. He referred to the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Jaipur II vs. Super Synotex (India) Ltd. [2014 (301) ELT 273 (SC)] and CCE, Delhi III vs. Maruti Suzuki India Ltd. [2014 (307) ELT 625 (SC)]. He also relied on the instruction of CBEC dated 17.9.2014 under which instructions were issued by CBEC in the light of judgment of Hon'ble....

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....ed to the bank account of the appellant. We find that the decision of the Tribunal is specifically applicable to the facts in the present case. The observations of the Tribunal in Shree Cement Ltd. case (supra) are reproduced below: "7. We have heard both sides at length and perused the appeal record. As out lined above, the appellants are covered by the Investment Promotion Schemes of the Rajasthan Government. In terms of the various schemes of the Rajasthan Government, the appellants are required to discharge their VAT liability by making payment of the same. Out of such VAT credited to the Government, a certain portion is disbursed back to them in the form of subsidies. Such disbursement happens in the form of VAT 37 B, challan ....

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....of sale of the goods manufactured. A part of such VAT is given back to them in the form of subsidy in Challan 37 B. Such Challans are as good as cash but can be used only for payment of VAT in the subsequent period. In terms of the scheme of the Government of Rajasthan payment of VAT using such Challan are considered legal payments of tax. In view of the above, Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid. 10. It is pertinent to reproduce the observations of the Tribunal in the Welspun Corporation Ltd. case "5.1 The Respondent company opted for "Remission of Tax Scheme" and was thus eligible for the Capital subsidy in the for....