TaxTMI 
TaxTMI 
2026 (6) TMI 1226
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....ar Commissionerate. By the impugned order, the learned Commissioner confirmed a demand of Central Excise duty amounting to Rs.7,67,01,773/- (Rupees Seven Crores Sixty-Seven Lakhs One Thousand Seven Hundred and Seventy-Three only), together with interest thereon and an equal penalty under the relevant provisions of the Central Excise Act, 1944. 2. The sole question requiring determination in this appeal is whether the Industrial Promotion Subsidy (hereinafter referred to as "IPS") disbursed under the Package Scheme of Incentives 2001/2007 (hereinafter referred to as "PSI-2001/2007") of the Government of Maharashtra constitutes "additional consideration" and therefore forms part of the "assessable value" as defined under Section 4(3)(d) of....
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....enefits by way of electricity duty exemption and stamp duty exemption) made within the period from 1.4.2007 to 31.3.2012, to be availed over a period of 7 years counted from 1.4.2010 or to the extent of taxes paid to the State Government, within a period of 7 years, whichever is lower. 4. The quantum of IPS receivable by the Appellant was governed by a Memorandum of Understanding (MOU) dated 28.09.2011 executed between the Appellant and the Government of Maharashtra. The computation mechanism under the MOU takes into account VAT/CST paid by the Appellant as one of several components for determining the IPS amount. 5. Revenue, upon receiving intelligence that the Appellant was obtaining refunds of VAT/CST under the incentive scheme wit....
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....moval of goods from the factory, at which juncture the taxes are "actually paid". Any subsequent refund or incentive received from the State Government does not alter the liability already crystallised at the time of removal. (c) The amounts received by way of IPS do not flow, directly or indirectly, from the buyer of goods, which is a sine qua non for inclusion in the transaction value under Section 4(3)(d) of the Act. IPS is a State subsidy linked to eligible capital investment and regional industrial promotion and bears no nexus to any individual sale transaction. (d) The definition of transaction value u/s. 4(3)(d) ibid is exhaustive in character. Revenue cannot travel beyond the plain language of the statute to includ....
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....4(3)(d) - "transaction value" means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods." "Rule 6 - Where the excisable goo....
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....ssly provided for in the statute and operates at the point of removal. 11. The phrase "actually paid" in Section 4(3)(d) must be read in its temporal context. The excise duty liability arises at the time of removal of goods from the place of manufacture. At that point of time, the Appellant collected VAT/Sales Tax from its customers and remitted the same in full to the State exchequer. The said amounts were accordingly excluded from the transaction value in compliance with Section 4(3)(d) ibid. The statutory obligation was thus discharged at the time of removal, and the transaction value was lawfully determined on that basis. 12. The subsequent receipt of IPS from the Government of Maharashtra does not, and cannot, alter the transacti....