2019 (7) TMI 1677

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....he First Schedule to the Central Excise Tariff Act, 1985. The Department has entertained a view that the respondent/assessee has not discharged their duty liability properly as they have not included the additional consideration of sales tax collected by them from the buyers and retained by them equivalent to the VAT-37B challan which have been issued to them as per the policy of Rajasthan Government under Rajasthan Investment Promotion Policy, 2010. The Department is of the view that amount of sales tax retained by them which has equivalent to VAT-37B challans received by them from the Rajasthan Government should have form a part of transaction value as per the provision of Section 4 (3) (d) of the Central Excise Act, 1944 and which result....

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....d 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 the Central E....

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....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 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 ....