TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 970
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....ve received investment subsidy amounting to Rs. 15,97,279/- against various entitlement certificates which were issued to them as per the prevailing policy under Rajasthan Investment Promotion Scheme, 2010. As per the investment subsidy ledger and balance sheet and other books of accounts, the entitlement certificates used under RIPS 2010 the appellant have used the same towards payment of the VAT/CST. It is also matter of record that Government of Rajasthan in order to promote investment in the State of Rajasthan and to further the cause of generation of employment opportunities, the above-mentioned Rajasthan Investment Promotion Scheme 2010 (RIPS 2010) have been started. The basic silent features of the scheme are that it grants subsidy a....
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.... it has been held that there is no justification for inclusion of the subsidy used for the payment of VAT amount in the assessable value and accordingly the demand of central excise duty on this account has been dismissed. This Tribunal in the case of Shree Cement Ltd. vs. CCE, Alwar in its final order No. 50189-50191 of 2018 dated 18th January, 2018 has decided the above issue in detail. The relevant extract of the above decision are reproduced here below :- "4. The learned Counsel for the appellant explained in detail the scheme of the Rajasthan Government regarding the grant of subsidy for new enterprises. He explained that the VAT is initially paid to the Government of Rajasthan before a portion of the same is granted as subsidy in the....
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....s 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 which can be utilized in subsequent periods to discharge VAT liability. The crux of the dispute in the present case is whether such subsidy amounts are required to be included in the assessable value of the goods manufactured by the appellants, in terms of Section 4 of....
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.... 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 form of remission of Sales Tax subject to the conditions to be fulfilled.... The subsidy in the form of remission of sales tax was in fact a percentage of capital investment... Separate assessment orders were thus issued by the assessing officer of the sales tax department from time to time towards th....