2019 (5) TMI 1617

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.... that the appellant had received Rs. 789.92 lakhs as receipt of VAT refund/ subsidy as an industrial investment promotion assistance under Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2004. The Department formed the opinion that the aforesaid amount is chargeable to Central Excise duty in accordance of the definition of transaction value. As the said amount of excise duty i.e. 98.05 lakhs has not been deposited by the appellant, same was proposed to be recovered from them vide the show cause notice No. 16742 dated 31 January, 2018 alongwith the interest at the appropriate rate with the proportionate penalties. The said proposal was confirmed by the original Adjudicating Authority vide Order No. 3780 dated 5 July, 2018. ....

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....ment account. The said VAT amount is includable in transaction value of goods and subjected to excise duty as per the provisions of Section 4(3) (d) of Central Excise Act, 1944. 3. To rebutt these arguments, learned Counsel for the appellant has submitted that the Madhya Pradesh Government had provided financial assistance for the industrial promotion and development in these states. Inasmuch as the same cannot be said to be a VAT refund or any subsidy. The VAT and other taxes collected from buyers were remitted to the State Government without retaining or appropriating anything whatsoever on account of any promotional schemes including the impugned scheme. It is denied that the alleged amount received by the appellant was a VAT refund o....

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....ssee. However, in the instant case, the subsidy has been underpaid to assessee by the State Government as a financial assistance Industrial Promotion Scheme of MP State Government. Only the mode of payment is by way of crediting the sales tax head under VAT challan in favour of the appellant. Thus, it could not be said that the amount is in the nature of additional consideration. 4.2 In the present case, the remission is in the nature of subsidy which the appellant was receiving from the State Government in the form of VAT 37B Challans and not from the buyers of the appellant. The said remission was not only as good as cash but can also not be considered as an additional consideration. 4.3 The issue is no more res integra. We also dra....