2024 (5) TMI 1128 - AT - Central Excise

Valuation - incentive received under Sales Tax package Scheme of Incentive - whether the same is on account of discount and should form part of the transaction value under Section 4(1) (a) read with Section 4(3) (d) of the Central Excise Act 1944? - HELD THAT - An identical issue to the present case has been dealt with by the Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE RAIGAD BALKRISHNA INDUSTRIES LTD. ESSEL PROPACK LTD. VERSUS UTTAM GALVA STEELS LTD. BHUSHAN STEEL LTD. JSW ISPAT STEEL LTD. COMMISSIONER OF CENTRAL EXCISE AURANGABAD 2015 (10) TMI 1727 - CESTAT MUMBAI where it was held that In any case in the present case the amount payable has not been varied by the Sales Tax Authorities. Under the facts of the present cases in our view the Explanation may not be of any help to the Revenue as at the time of clearance the term actually payable was relevant and not actually paid . Further the amount of actually payable sales tax has not been varied by the Sales Tax Authorities. The Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE BANGALORE VERSUS MAZAGON DOCK LTD. 2005 (7) TMI 105 - SUPREME COURT have held that subsidy received from the Government cannot be said to be the additional consideration as it is not received from the buyer either directly or indirectly and thus not includable in the price of the excisable goods for the purpose of payment of central excise duty. There are no merits in the impugned orders passed by the learned Commissioner (Appeals) in confirming the adjudged demands on the appellant. Therefore the impugned orders are set aside - appeal allowed.

Summary

Issues involved: Interpretation of incentive received under Sales Tax package Scheme of Incentive, inclusion of incentive in transaction value for Central Excise duty calculation.

Summary:
The Appellate Tribunal CESTAT MUMBAI heard the case where the appellant availed benefits under the Sales Tax package Scheme of Incentive by the Government of Maharashtra. The incentive received was deemed as discount by the Department, leading to a dispute regarding inclusion in transaction value for Central Excise duty calculation. The appellant challenged the confirmation of adjudged demands by the learned Commissioner (Appeals) through appeals before the Tribunal.

The appellant argued that previous judgments supported their case, citing cases such as Commissioner of Central Excise, Raigad Vs. Uttam Galva Steels Ltd. and others. The Tribunal referred to the case of Uttam Galva Steel Ltd. where the issue was similar. The Tribunal emphasized that the exclusion of sales tax and other taxes actually paid or payable is clear under Section 4(3)(d) of the Central Excise Act. The timing of payment under the deferral scheme was crucial, and the Explanation in the Act did not support the Department's argument. The Tribunal also mentioned the Supreme Court's decision in Mazagon Dock Ltd., stating that subsidies received from the Government are not additional consideration for excisable goods.

Based on established legal principles, the Tribunal found no merit in the impugned orders of the learned Commissioner (Appeals) confirming the demands. Consequently, the Tribunal set aside the impugned orders and allowed the appeals in favor of the appellant.