2019 (2) TMI 471

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....- during the period August 2015 to September 2016 under protest on the sales tax amount of Rs. 25,53,026/- which was allegedly collected from the buyers and retained by the appellant. It was the contention of the department that as per the provisions of Section 4 (3) (d) of the Central Excise Act, 1944, the transaction value does not include the duty of excise, sales tax and other taxes, if actually payable on the manufactured goods. Since, in the present case, the part of the sales tax was retained by the assessee, the department entertained a view that the amount which was retained by the appellant, required to be added to the assessable value of the manufactured goods as per the provision of Section 4 of Central Excise Act, 1944 for the ....

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....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 the Central Excise Act. As per the concept of transaction value outlined in Section 4, wi....

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.... 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 the incentive scheme amount. The Competent Authority was required to necessarily pass o....