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2023 (6) TMI 449 - AT - Central ExciseValuation - amount of subsidy received by the respondent from the State Government under the Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2004 is includible in the assessable value of the goods cleared during the period in dispute i.e. from 2012-2013 to 2015-2016 or not - section 4(3)(d) of the Central Excise Act, 1944. HELD THAT - The reference was made by the Division Bench in M/S HARIT POLYTECH PVT. LTD. VERSUS COMMISSIONER, CENTRAL EXCISE CGST- JAIPUR I, GANPATI PLASTFAB LTD., M/S APEX ALUMINIUM EXTRUSION PVT. LTD., M/S MAHA MAYAY STEELS, M/S. TIRUPATI BALAJI FURNACES PVT. LTD., M/S. TRANS ACNR SOLUTIONS PVT. LTD., M/S. FRYSTAL PET PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS CGST- ALWAR 2023 (3) TMI 1120 - CESTAT NEW DELHI and after referring to the provisions of law and the various decisions referred to by the assessee and the Department, the reference was answered holding that The decision of the Supreme Court in COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II VERSUS M/S. SUPER SYNOTEX (INDIA) LTD. AND OTHERS 2014 (3) TMI 42 - SUPREME COURT would not be applicable to the facts of the present case as that was a case where 25% of the amount collected as sales tax from the customers was paid by the assessee and the remaining 75% of the amount was retained by the assessee, which amount was treated to be the price of the goods. In the promotion policy involved in the present case, the subsidy does not reduce the sales tax that is required to be paid by the assessee as the entire amount of sales tax collected by the assessee from the customer is paid. The subsidy amount, therefore, cannot be included in the transaction value for the purpose of levy of central excise duty under section 4 of the Excise Act. The decision of the Supreme Court in Super Synotex India was considered in the aforesaid order and it was held that it would not be applicable in the facts of the present case. In view of the aforesaid answer to the reference made by the Division Bench, the order of the Commissioner (Appeals) does not suffer from any illegality so as to call for interference - appeal dismissed.
Issues Involved:
1. Whether the subsidy received by the respondent from the State Government is includible in the assessable value of goods for the purpose of Central Excise duty. 2. Whether the decision of the Supreme Court in Super Synotex India Ltd. is applicable in the present case. Issue 1: The department appealed against the order setting aside the recovery of Central Excise duty from the respondent, M/s Grasim Industries Ltd., based on the subsidy received under the Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2004. The Commissioner (Appeals) held that the subsidy amount should not be included in the transaction value for levy of Central Excise duty under section 4 of the Excise Act. The respondent contended that they had paid the entire Sales Tax to the State Government, making the Supreme Court judgment inapplicable to their case. Issue 2: The reference arose due to a difference of opinion between the two Members of the Division Bench regarding the impact of the subsidy on the selling price of goods. The Member (Technical) held that the subsidy does not reduce the selling price and is not an additional consideration, thus the Super Synotex India Ltd. decision is not applicable. The reference concluded that the subsidy amount does not affect the selling price of the goods and should not be included in the transaction value for Central Excise duty levy. The decision of the Supreme Court in Super Synotex India was considered and deemed inapplicable to the present case based on the reference answer. The order of the Commissioner (Appeals) was upheld, and the appeal by the department was dismissed.
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