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TMI Blog2019 (4) TMI 1645X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be included in the Transaction value for payment of excise duty. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 53030 of 2018 - A/50527/2019-EX[DB] - Dated:- 26-3-2019 - Shri Justice Dilip Gupta, President And Shri C.L. Mahar, Member (Technical) Shri Sanjay Grover, Advocate for the appellant. Shri V.B. Jain, Authorized Representative (DR) for the Respondent. ORDER JUSTICE DILIP GUPTA :- This appeal has been filed to assail the order dated 25 June 2018 passed by the Commissioner, CGST, Central Excise Customs, Jabalpur by which central excise duty of ₹ 2,26,10,255/- short paid by the appellant has been ordered to be recovered under Section 11A (10) of the Central Excise Act, 1944 readwith Section 174 of the Central GST Act, 2017 with interest and penalty. 2. The appellant is registered with the Central Excise department and is engaged in the manufacturing of woven sacks. The period of clearances involved in the appeal are from 2009-2010 to 2016-2017. During this period, the appellant cleared the woven sacks by paying duty on Transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial Investment Promotion assistance granted to units shall be restricted to 50%/ 75% of tax deposited as per sales tax assessment order. 4. The appellant applied for financial assistance and the same was granted for a period of 10 years from 26 March 2008 to 25 March 2018. The financial assistance relating back to the clearances of goods from 2009-2010 upto 2016-2017 are contained in following chart :- Year of VAT payment Total VAT paid Total CST paid Relevant year of subsidy Amount of subsidy received Actual date of receipt of subsidy 2009-10 13493491 44581 2012-2013 10120118 31/03/2013 2010-11 24512460 720839 2013-2014 18924000 31/03/2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of VAT left after/before payment made by the Government. In this way, the appellant had retained the VAT amount collected to the extent which has been paid back by the State Government. It was, therefore, stated that the amount of VAT refunded under 2004 Scheme and received by the appellant has to be included in the Transaction value for payment of excise duty in terms of Section 4 (3) (d) of the Central Excise Act, 1944. 6. The appellant filed a reply to the show cause notice mentioning therein that the Transaction value would not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods and the appellant had paid the full Commercial Tax and Central Sale Tax after adjustment of the Commercial Tax paid on raw materials without retaining any amount of assistance to be received in future. It was also contended that the decision of the Supreme Court in Super Synotex India Ltd. would not be applicable to the incentive provided under the 2004 Scheme since subsidy granted later is an incentive and not a consideration for goods sold. The appellant, therefore, prayed that the proceedings be dropped. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64, dated 05/01/2013, order no. 4291, dated 12/12/2013, and order no. 3676, dated 06/09/2014 by MP Trade Investment Facilitation Corporation Ltd., Bhopal for the year 2009-2010, 2010-11 and 2011-12 respectively, it was clearly mentioned at para 3 that the bankers cheque/demand draft towards the amount sanctioned through this order would be issued in favour of Commercial Tax Office, Circle-Rewa, District Rewa (M.P.) and this deposition would be treated as an advance tax deposited by Assistance Receiver for the particulars stated above. 22.3 It is observed that the amount sanctioned as incentive in their commercial tax account as advance tax were utilized by the Noticee for the payment of tax for the subsequent period. Even the Noticee has utilized the said amount sanctioned for the payment of tax for the subsequent years. Thus it is pertinent to mention here is that the amount of tax collected from the buyers by the Noticee for the current years were not paid into VAT account of Government but 75% was retained as the payment was done through advance deposit issued by the State Government. Thus the payment of the incentive received by the Noticee from the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning 75% was to be retained by the assessee, whereas under the 2004 Scheme, the entire amount collected by the assessee was required to be deposited with the State authorities. 13. It would be pertinent to refer to the relevant portion of the decision of the Tribunal in Shree Cement Ltd. and it is as follows :- 7. We have heard both sides at length and perused the appeal record. As out lined above, the appellants are covered by the Investment Promotion Schemes of the Rajasthan Government. In terms of the various schemes of the Rajasthan Government, the appellants are required to discharge their VAT liability by making payment of the same. Out of such VAT credited to the Government, a certain portion is disbursed back to them in the form of subsidies. Such disbursement happens in the form of VAT 37 B, challan which can be utilized in subsequent periods to discharge VAT liability. The crux of the dispute in the present case is whether such subsidy amounts are required to be included in the assessable value of the goods manufactured by the appellants, in terms of Section 4 of the Central Excise Act. As per the concept of transaction value outlined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of tax is thus directly related to capital investment in fixed asset. There was no option to claim exemption from payment of sales tax. The quantum of remission was based upon the investment made in the fixed assets. The condition of the remission amongst others included to remain in production, employment of certain percentage of persons in assessee unit, and numerous other conditions as brought out in Para 9 of the impugned Order-in-Appeal. 11. By following the decision of the Tribunal in the Welspun Corporation Ltd. case we conclude that there is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans . 14. The Tribunal in M/s Maihar Cement followed the afore-said decision rendered in M/s Shree Cement Ltd. as basically both the Scheme of the Rajasthan Government and Madhya Pradesh Government were identical. 15. In the present case, as noticed above, the appellant in terms of the 2004 Scheme had deposited the entire amount of VAT collected. It is this amount that is used as a measure for granting financial assistance to be subsequently provided. In terms of Clause 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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