2019 (7) TMI 1677 - AT - Central Excise

Valuation - inclusion of additional consideration of sales tax collected by them from the buyers and retained by them equivalent to the VAT-37B challan - issued as per the policy of Rajasthan Government under Rajasthan Investment Promotion Policy 2010 - Section 4 (3) (d) of the Central Excise Act 1944 - HELD THAT - The matter is no longer res-integra as it has already been decided by this Tribunal in the case of M/S SHREE CEMENT LIMITED VERSUS COMMISSIONER (APPEALS) CENTRAL EXCISE CENTRAL GOODS SERVICE TAX 2019 (9) TMI 66 - 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. Since the facts of the case are similar to one which has already been decided by this Tribunal in the said final order it is held that the order-in-appeal of the Commissioner (Appeals) is legally sustainable - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the additional consideration of sales tax collected by the respondent and retained by them should form a part of the transaction value for the purpose of central excise duty liability.
2. Whether the VAT amounts paid by the assessee using VAT 37B Challans should be included in the assessable value of the goods manufactured.

Issue 1:
The respondent, engaged in manufacturing P.P. Woven Sacks, was alleged by the Department to have not discharged their duty liability properly by not including the additional consideration of sales tax collected by them and retained, equivalent to the VAT-37B challans issued under the Rajasthan Investment Promotion Policy, 2010. The Department contended that this amount should have formed part of the transaction value as per Section 4(3)(d) of the Central Excise Act, leading to short payment of central excise duty. A show cause notice was issued demanding duty, penalties, and interest. The Assistant Commissioner confirmed all charges, but the Commissioner (Appeals) allowed the appeal of the respondent, stating the original order lacked merit. The Tribunal, citing a previous case involving a similar issue, upheld the Commissioner's decision, emphasizing that the VAT amounts retained by the respondent using VAT 37B Challans need not be included in the assessable value for excise duty calculation.

Issue 2:
The Tribunal referenced a previous case involving the Investment Promotion Schemes of the Rajasthan Government to establish a precedent regarding the inclusion of VAT amounts paid using VAT 37B Challans in the assessable value. The Tribunal noted that the subsidies received by the assessee in the form of VAT 37B Challans, which could be used to discharge VAT liabilities in subsequent periods, should not be considered as VAT actually paid for the purpose of excise duty calculation. The Tribunal differentiated the case at hand from a Supreme Court decision, highlighting that the VAT subsidies received were legitimate payments under the Rajasthan Government scheme. By following the decision in the referenced case, the Tribunal concluded that there was no justification for including the VAT amounts paid using VAT 37B Challans in the assessable value, thereby dismissing the appeal of the Department.

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