2023 (5) TMI 435 - AT - Central Excise

Levy of Central Excise Duty - subsidy received by the appellant under the Rajasthan Investment Promotion Scheme, 2014 (RIPS) - Subsidy forms consideration for the purpose of levy of excise duty or not? - suppression of facts or not - extended period of limitation - HELD THAT:- The Government of Rajasthan had introduced the Rajasthan Investment Promotion Scheme, 2014 with a view to promote investment in the State and to generate employment opportunities through such investment. The scheme provided for various exemptions and at the same time provided for investment subsidy - The appellant is covered by the investment promotion scheme of the Rajasthan Government and in terms thereof they are required to discharge their VAT liability by making payment of the same. The VAT so credited to the Government, certain portion is disbursed as VAT to the appellant in the form of subsidies in form of VAT 37B challan which can then be utilised in the subsequent period towards discharge of VAT liability.

The appellant has been following the said practice and therefore the present case is squarely covered by the decision of the SHREE CEMENT LTD. SHREE JAIPUR CEMENT LTD. VERSUS CCE, ALWAR [2018 (1) TMI 915 - CESTAT NEW DELHI], wherein this Tribunal has considered the same subsidy under Rajasthan Investment Promotion Scheme and relying on the earlier decision of the Tribunal in COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I VERSUS M/S WELSPUN CORPORATION LTD. [2017 (5) TMI 177 - CESTAT MUMBAI] which dealt with the incentive in the form of subsidy under the Sales Tax Incentive Scheme, 2001, concluding that there is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B challans.

Extended period of limitation - show cause notice dated 22.08.2019 for the period April, 2016 to March, 2017 - assessee did not disclose the correct information to the Department - HELD THAT:- Although, the issue on merits has been decided in favour of the appellant and therefore the issue of extended period of limitation does not require any decision thereon.

The issue whether the subsidy amount was includible in the transaction value in terms of Section 4(3)(d) of the Central Excise Act was a matter of interpretation of law and therefore the allegation of suppression of fact are not applicable in the present case and consequently neither interest nor penalty is leviable. The allegation of mis-representation with reference to the inclusion of the subsidy amount under the instant scheme have been considered by the Tribunal in M/S. SELECT POLY PRODUCTS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2019 (1) TMI 556 - CESTAT NEW DELHI] and also in HONDA MOTORCYCLE AND SCOOTERS INDIA PVT. LTD. VERSUS C.G.S.T.C. & C.E., ALWAR [2019 (4) TMI 748 - CESTAT NEW DELHI] where it was held that discharge of liability by way of VAT 37B Challans has already been held as legally sustainable methodology of discharging tax liability for subsequent period. It is held that, in the given circumstances, Department was not entitled to invoke the extended period of limitation. The demand could be confined only to the normal period of one year.

The impugned orders are unsustainable - Appeal allowed.