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TMI Blog2019 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... llant had not paid full amount of the central excise duty by not including the element of the sales tax collected by it from the buyers in the assessable value and thereby violated the provision of Section 4 of Central Excise Act, 1944. The appellant contended that the amount of sales tax retained by the appellant in the form of VAT-37A challan (received from the Rajasthan Government) did not form part of the transaction value as per the provision of Section 4 (3) (d) of the Central Excise Act, 1944 for payment of central excise duty. 2. Accordingly, a show cause notice demanding excise duty of Rs. 20,77,340/- under Section 11A (1) of the Central Excise Act, 1944 came to be issued. Interest and penal provision were also invoked by the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 in Section 4, with effect from 01/07/2000, any sales tax/VAT actually paid can be deducted from the transaction value for payment of excise duty. Revenue has taken the view that payment of VAT using 37B Challans canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the Welspun Corporation Ltd. case "5.1 The Respondent company opted for "Remission of Tax Scheme" and was thus eligible for the Capital subsidy in the form of remission of Sales Tax subject to the conditions to be fulfilled.... The subsidy in the form of remission of sales tax was in fact a percentage of capital investment... Separate assessment orders were thus issued by the assessing officer of the sales tax department from time to time towards the incentive scheme amount. The Competent Authority was required to necessarily pass order for remission of such tax separately for each tax period. The remission of tax is thus directly related to capital investment in fixed asset. There was no option to claim exemption from payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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