TaxTMI 
TaxTMI 
2023 (12) TMI 476
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....al Commissioner of CGST & Central Excise, Bhopal [the Principal Commissioner] confirming the levy of central excise duty with interest and penalty. 2. The issue involved in this appeal is whether the incentive/industrial subsidy of 75% of Sales Tax/VAT/CST paid on the sale of goods, received from the Government of Madhya Pradesh under the Industrial Promotion Policy, 2010 would be includable in the transaction value under section 4 of the Central Excise Act, 1944 [the Central Excise Act] by treating the same as an additional consideration flowing directly or indirectly from the buyers to the assessee, in a case where: (a) 100% of the sales tax payable, was paid by the appellant to Commercial Tax Department of the State....
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.... submitted and a certificate of registration dated 25.07.2009 was issued. Thereafter, sanction orders for every financial year were passed by M.P. Trade & Investment Facilitation Corporation Ltd., mentioning inter-alia the amount of tax deposited during the year, eligible percentage of sales tax of 75%, amount sanctioned and maximum remaining eligible amount for assistance. 7. A show cause notice dated 07.05.2018 was, however, issued by the Commissioner, Bhopal treating the said subsidy amount as additional consideration under section 4 of the Central Excise Act read with rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 [the Valuation Rules] and central excise duty of Rs. 02,03,44,000/- ....
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.... appellant in the interim order dated 21.03.2023 passed in M/s. Harit Polytech Pvt. Ltd. vs. Commissioner, Central Excise and CGST-Jaipur- I [Excise Appeal No. 51011 of 2019 decided on 21.03.2023] on a difference of opinion having arisen between two learned Members of the Division Bench of the Tribunal. The relevant portions of the order are as follows: "20. Under the promotion policy involved in these appeals, the subsidy does not reduce the sales tax that is required to be paid by the assessee. The entire amount of sales tax collected by the assessee from the customers is required to be paid. A portion is deposited through VAT 37B challan issued to the assessee by the State Government as subsidy under the promotion policy an....
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....o the facts of the present case as that was a case where 25% of the amount collected as sales tax from the customers was paid by the assessee and the remaining 75% of the amount was retained by the assessee, which amount was treated to be the price of the goods. In the promotion policy involved in the present case, the subsidy does not reduce the sales tax that is required to be paid by the assessee as the entire amount of sales tax collected by the assessee from the customer is paid. The subsidy amount, therefore, cannot be included in the transaction value for the purpose of levy of central excise duty under section 4 of the Excise Act." (emphasis supplied) 12. The reference was, accordingly, answered holding that: ....