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2018 (3) TMI 16 - AT - Central ExciseRebate claim - N/N. F.4(72)FD/Gr.IV/81-18 dated 06.05.1986 - Department was of the view that the rebate so claimed by the appellant is nothing but a form of exemption from payment of CST/VAT and is includible in the transaction value for payment of Central Excise duty - Held that - N/N. F.4(72)FD/Gr.IV/81-18 dated 06.05.1986 of the Government of Rajasthan has allowed partial exemption from the tax payable in respect of the goods in the course of the inter-state trade subject to the condition attached to the Notification. Since the eligibility can be determined only after knowing the total quantum of goods sold within the State as well as in the course of inter-state trade in a full accounting year, the benefit of the notification is allowed to the appellant only during the assessment. In the present case, the appellant has claimed that they have paid the CST without the partial exemption at the time of clearance of the goods. But during the assessment of the VAT returns, such VAT paid is taken into account and if the appellant is eligible, the same is adjusted when partial exemption is allowed to the appellant in terms of the VAT Notification dated 06.05.1986. The net result of the assessment for CST is that the CST actually paid is at the partially exempted rate. The benefit of deduction from transaction value will be restricted to the actual CST paid i.e. at the partially exempted rate. Appeal dismissed - decided against appellant.
Issues:
Interpretation of Notification No. F.4(72)FD/Gr.IV/81-18 dated 06.05.1986 for partial exemption from sales tax, inclusion of rebate in transaction value for Central Excise duty, applicability of Section 4(3)(d) of the Central Excise Act, deduction of CST for assessable value, distinction between remission and rebate, relevance of Tribunal and Supreme Court decisions. Analysis: 1. Notification Interpretation: The appellant claimed partial exemption under Notification No. F.4(72)FD/Gr.IV/81-18 dated 06.05.1986 for sales tax. The Department contested that such rebate constituted exemption from CST/VAT, impacting Central Excise duty. The issue revolved around the eligibility criteria and timing of claiming the benefit under the notification. 2. Inclusion of Rebate in Transaction Value: The appellant argued that the rebate/remission under the notification should not be included in the assessable value for Central Excise duty. They contended that CST was paid at full rate during goods removal, with the rebate known only during year-end assessments. The Department insisted on restricting the deduction to the CST payable after availing partial exemption. 3. Applicability of Section 4(3)(d) of the Central Excise Act: The definition of transaction value under Section 4(3)(d) was crucial in determining the deductibility of sales tax and other taxes. The appellant justified full CST deduction based on the timing of exemption realization, while the Department sought restriction to the partially exempted rate. 4. Tribunal and Supreme Court Precedents: The appellant relied on the Tribunal decision in CCE vs. Welspun Corporation Ltd. to support their position on remission vs. rebate. However, the Revenue distinguished the case, emphasizing the partial exemption nature of the notification. The judgment referenced the Supreme Court ruling in CCE vs. Super Synotex (India) Ltd., highlighting the requirement for actual VAT payment for deduction from transaction value post-amendment in Section 4 of the Central Excise Act. 5. Final Decision: Considering the specifics of the case and the legal precedents, the Tribunal upheld the impugned order, dismissing the appeal. The judgment concluded that the benefit of deduction from transaction value should align with the actual CST paid at the partially exempted rate, in line with the Supreme Court's interpretation. The Tribunal differentiated the present case from Welspun Corporation, emphasizing the restricted deductibility of VAT at the exempted rate for assessable value calculation under Section 4(3)(d). This detailed analysis of the legal judgment encompasses the key issues, arguments presented by both parties, relevant legal provisions, and the final decision rendered by the Appellate Tribunal CESTAT NEW DELHI.
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