TMI Blog2019 (3) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... is given back to them in the form of subsidy in Challan 37 B. Such Challans are as good as cash but can be used only for payment of VAT in the subsequent period. In terms of the scheme of the Government of Rajasthan payment of VAT using such Challan are considered legal payments of tax - In view of the above, Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid. There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans - Appeal allowed - decided in favor of appellant. - Appeal No. E/52863/2018-(DB) - Final Order No: 50281/2019 - Dated:- 13-2-2019 - Mr. Anil Choudhary, Member (Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods cleared by the appellants and demanded the differential duty. The impugned orders also charged interest and penalties on such differential duty. 3. With the above background we heard O P Agarwal, Ld. Counsels for the appellant as well as Shri V B Jain, Ld. DR for the Department. 4. The Ld. Counsel for the appellant explained in detail the scheme of the Rajasthan Government regarding the grant of subsidy for new enterprises. He explained that the VAT is initially paid to the Government of Rajasthan before a portion of the same is granted as subsidy in the form of Challan Form 37B. Such challan is one of the modes which is allowed to be utilized for payment of VAT in the subsequent period along with other modes of payment includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms 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 in Section 4, with effect from 01/07/2000, any sales tax/VAT actually paid can be dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by utilizing such subsidy challans cannot be taken as VAT actually paid. 10. It is pertinent to reproduce the observations of the Tribunal 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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