2018 (11) TMI 520 - AT - Central Excise

Valuation - inclusion of investment subsidy granted in Form 37B in assessable value - Held that - Identical issue decided in the case of SHREE CEMENT LTD. SHREE JAIPUR CEMENT LTD. VERSUS CCE, ALWAR 2018 (1) TMI 915 - CESTAT NEW DELHI , where it was held that There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Interpretation of investment promotion scheme under Rajasthan Government for subsidies and VAT liability disbursement.

Analysis:
The appeal was filed against orders dated 08/06/2018 and 24/05/2018 concerning the appellant's eligibility for subsidies under Rajasthan Investment Promotion Scheme. The appellant was required to deposit VAT/CST/SGST and entitled to subsidy disbursement. The Revenue included subsidy amounts in the value of goods cleared by the appellant, leading to a duty demand. The Tribunal referred to a similar case involving investment promotion schemes and VAT liability. The Tribunal noted that VAT amounts paid using subsidy challans were considered legal payments of tax under the Rajasthan scheme. The Tribunal cited a case where subsidy amounts were not included in the transaction value, leading to the conclusion that VAT amounts paid using VAT 37B challans should not be included in assessable value.

Decision:
The Tribunal set aside the impugned orders and allowed the appeals, following the precedent that there was no justification for including VAT amounts paid by the assessee using VAT 37B challans in the assessable value. The Tribunal emphasized that the subsidy amounts disbursed in the form of VAT 37B challans could be utilized in subsequent periods to discharge VAT liability, hence should not be considered as part of the assessable value of goods.