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2019 (5) TMI 210 - AT - Central ExciseValuation - deduction of VAT from transaction value - inclusion of subsidy amount in the assessable value - Section 4(3) (d) of Central Excise Act - HELD THAT - Identical issue decided in the case of KHANNA POLYWARE (P) LTD. VERSUS CCE, JABALPUR 2018 (3) TMI 177 - 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 dismissed - decided against Revenue.
Issues:
1. Whether the deduction of VAT from transaction value is admissible only for the amount of tax paid or payable. 2. Whether the reimbursed amount under the Scheme should be included in the transaction value of goods for payment of Central Excise Duty. 3. Whether the subsidy amounts received by the appellant are required to be included in the assessable value of the goods manufactured. 4. Whether the VAT liability discharged by utilizing subsidy challans can be considered as VAT actually paid. Analysis: 1. The appeal was filed against the order setting aside the decision of the Adjudicating Authority regarding the deduction of VAT from the transaction value. The respondent, a manufacturer of "Corrugated Boxes," was receiving a refund of VAT under the Madhya Pradesh Industrial Promotion Assistance Scheme. The Revenue contended that only the actual amount of VAT payable should be deducted, not the whole amount collected from buyers. Citing the decision in the case of CCE vs. Sponge Corporation Limited, the Commissioner (Appeal) set aside the demand. However, the Revenue argued that the reimbursed amount should be included in the transaction value for Central Excise Duty payment, as per Section 4(3)(d) of the Central Excise Act and the Supreme Court's decision in CCE, Jaipur vs. Super Synotex (India) Limited. 2. The Tribunal referred to a similar case involving subsidy received under the MP Industrial Permanent Assistance Scheme. The dispute centered around whether the subsidy amount should be included in the transaction value under Section 4(3)(d) of the Central Excise Act. The Tribunal noted that the subsidy was paid in the form of advance tax to the Commercial Tax Department and adjusted against the tax payable by the appellant. The Tribunal distinguished between actual payment of VAT and the use of subsidy challans, ultimately rejecting the Revenue's argument that the VAT liability discharged through subsidy challans cannot be considered as VAT actually paid. 3. In another case involving investment promotion schemes of the Rajasthan Government, the Tribunal addressed the inclusion of subsidy amounts in the assessable value of goods. The Tribunal highlighted the concept of transaction value under Section 4 of the Central Excise Act, emphasizing that any sales tax/VAT actually paid can be deducted. The Tribunal noted the distinction made in previous decisions regarding the remission of tax schemes and held that subsidy amounts received need not be included in the transaction value, as they were considered legal payments of tax under the government scheme. 4. The Tribunal reiterated that the VAT liability discharged using subsidy challans should be considered as VAT actually paid, as per the scheme's requirements. It emphasized that the Revenue's view that such VAT liability discharge cannot be considered as VAT actually paid was incorrect. The Tribunal rejected the Revenue's appeal, stating that the issue was fully covered by previous decisions and upheld the order of the Commissioner (Appeal). In conclusion, the Tribunal's detailed analysis of the issues involved in the judgment highlighted the interpretation of relevant legal provisions and previous decisions to determine the admissibility of VAT deductions and the inclusion of subsidy amounts in the transaction value for Central Excise Duty payment.
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