TMI Blog2023 (7) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... reas in the present case VAT/Sales tax was very much payable while clearing the goods and subsequently the same was remitted by the State Government. This Tribunal considering the identical facts of remission of VAT/Sales tax in the case of Welspun Corporation Ltd held that the sales tax/VAT /CST actual payable but since the same was remitted it cannot be said that the sales tax/ VAT/CST was not payable. Therefore in terms of Section 4 (4) (d) (ii) of the Central Excise Act, 1944, the same is deducted from the assessable value. The ratio of the decision of Welspun Corporation Ltd is clearly applicable in the present case - the demand in the present case is not sustainable - Appeal allowed. - Excise Appeal No. 10862 of 2017 - Final Order No. A/ 11522 /2023 - Dated:- 14-7-2023 - HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. C.L. MAHAR Shri S. S Gupta Shri Mehul Jiwani, Chartered Accountants for the Appellant Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent ORDER RAMESH NAIR The brief facts of the case are that the appellant are engaged in the manufacture of Soda Lime Amber empty Glass Bottles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the VAT amount which though collected from the customers but for the same the State Government has granted the remission. Therefore, in these circumstances the same cannot be included in the assessable value for charging the excise duty. He submits that the identical issue has been considered by the Mumbai Tribunal in the case of Welspun Corporation Ltd 2017 (358) ELT 630 (Tri.- Mumbai). He also placed reliance on the following judgments:- Electrolux Kelvinator Ltd vs. Commissioner of Central Excise, Jaipur-I 2004 (163) ELT 395 (Tri. Del) Grasim Industries Vs. Commissioner of Central Excise, Indore, - 2007 (208) ELT 336 (Tri.-LB) Inalsa Ltd Vs. Commissioner of Central Excise, New Delhi 1997 (90) ELT 417 (Tri.) 2.1 He also relied upon the CBEC Circular No. 378/11/98/-CX dated 12.03.1998 wherein it was clarified that in such situation sales tax is also considered payable by the appellant within the meaning of the provisions of Section 4 (4) (d) (ii) of the Central Excise Act, 1944. He further submits that the Learned Commissioner while confirming the demand took the support of Hon ble Supreme Court Judgment in the case of Super Synotex (India) Ltd 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Ltd (Supra) held that the sales tax/VAT /CST actual payable but since the same was remitted it cannot be said that the sales tax/ VAT/CST was not payable. Therefore in terms of Section 4 (4) (d) (ii) of the Central Excise Act, 1944, the same is deducted from the assessable value. The relevant order of the Welspun Corporation Ltd is reproduced below:- 5. We have carefully considered the submissions made by both the sides and perused the records. 5.1 We have gone through the relevant clauses of Chapter IV-A of the Gujarat Value Added Tax Act, 2003. We find that the Government of Gujarat had declared Incentive Scheme 2001 wherein benefits provided under Economic Development of Kutch District, Government of Gujarat, Industries of Mines Department. Subsequently under the Gujarat Value Added Tax Act, 2003, the scheme was defined as per Rules 18A, 18B, 18 C 18D. 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. After applying to the Commissioner of Sales Tax/VAT, the eligible units were issued entitlement certificate and Form 110 to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isable goods; (i) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (ii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; (iii) from where such goods are removed; Transaction Value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. In terms of above Section 4, the duty is chargeable on excisable goods on its value which is to be determined at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court the issue concerned collection and retention of Sales Tax or deferred payment of Sales Tax where the tax initially collected was retained with the assessee for a certain period of years. As per the scheme of the State Government a lump-sum payment of a certain percentage of this amount of. Sales Tax collected during the years was assumed to be sufficient discharge of the entire amount so collected, thus allowing the differential amount of Sales Tax to accure to the benefit of the assessee. Hence, I find that the ratio of this ruling would not be applicable to the case of the appellants. The Instruction F. No. 6/S/2014-CX.1, Dated 17-9-2014 issued by the Board based on the ruling of Hon ble Supreme Court in the case of Super Synotex India Ltd (supra) also would stand distinguished for the reason that in case of the appellants the amount of Sales Tax collected and allowed to be retained was deemed to be paid in view of the sub-section (7A) of Section 11 of the Gujarat Value Added Tax Act, 2003. Even in the case of 11.2. CCE, Jaipur v. Shree Rajasthan Syntex Ltd. - 2015 (31S) E.L.T. 626 (S.C.) the Hon ble Supreme Court was seized of the Sales Tax Incentive Scheme, [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her find from the facts narrated in the impugned order that the incentive receivable as capital subsidy by the appellants was from the Department of Industries, whereas the Sales Tax amount collected was payable to the Department of Sales Tax but allowed to be retained and adjusted against such incentive by their very department which also granted refund of tax paid on raw materials and CST paid. This scheme was thus operated by Department of Sales Tax and accordingly Commercial tax officer has necessarily to pass order for each tax period. It implies that the State Government of Gujarat under which both the departments fall, would have put in place some mechanism whereby the incentive paid to the appellants by way of retention of Sales Tax collected from their customers and refund granted on other two items (VAT on purchases and CST) is reimbursed by the Department of Industries to the Department of Sales Tax. Hence for the above reason also we find that such amount, allowed to be remitted to the respondents as incentive which was otherwise payable to the Sales Tax department, cannot form part of the transaction value. 5. 7 The respondents have argued that in similar situati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les or purchases by any specified dealer or specified class of dealers from payment of the whole or part of the sales tax. On the other hand, the scheme of remission provided for under Section 41 of the Gujarat Value Added Tax Act, 2003, contemplates that the State Government/Commissioner of Sales Tax may remit the whole or any part of the tax payable in respect of any dealer or class of dealers. It is clear from reading of Section 5(2) as also Section 41 of the Act that while Section 5 grants exemption from the levy/payment of sales tax, remission under Section 41 is granted in respect of any part of the tax payable by a dealer. In case of exemption no tax is actually paid or actually payable, whereas in the case of remission, tax is actually payable and paid which is allowed to be remitted by way of retention or by way of refund. In the instant case as already discussed above it is not that Sales Tax was not only payable but in fact it stood actually paid, as the remission was nothing but the incentive or capital subsidy which the State Government granted with respect to the investment made by the appellants in the earthquake ravaged region of Kutch of State of Gujarat. Instead o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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