2020 (5) TMI 503

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....matter of record that the appellants have been availing the benefit of Rajasthan Investment Promotion Policy scheme. As per the provisions of Rajasthan Investment Promotion Policy Scheme 2003-2010 the appellants are provided with VAT 37 B Challan which can be used for payment of subsequent Sales Tax /VAT liability. During the period between July, 2015 to March, 2015, the appellants have used VAT 37 B Challan valuing at Rs. 9,22,42,077/- towards payment of their sales tax liability on the sale of finished goods cleared from the factory. The department has been of the view that since the amount of sales tax amounting to Rs. 9,22,42,077/- paid by the appellant in the form of VAT 37B Challan amounts to non-payment of sales tax and therefore, th....

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....reproduced hereinbelow:- "4. The Ld. 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 form of Challan Form 37B. Such challan is one of the modes which is allowed to be utilized for payment of VAT in the subsequent period along with other modes of payment including cash and input tax credit. He contended that the Revenue has wrongly proceeded under the presumption that the tax paid through 37B Challan does not represent actual payment of tax. He stressed on the fact that the scheme of the Rajasthan Government is not in the....

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.... 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, with effect from 01/07/2000, any sales tax/VAT actually paid can be deducted from the transaction value for payment of excise duty. Revenue has taken the view that payment of VAT using 37B Challans cannot be considered as actual payment of VAT. 8. Both sides have referred to the decision of the Apex Court in the case of Super Synotex India L....

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....tal 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 order for remission of such tax separately for each tax period. The remission of tax is thus directly related to capital investment in fixed asset. There was no option to claim exemption from payment of sales tax. The quantum of remission was based upon the investment made in the fixed assets. The condition of the remission amongst others incl....