Delhi CESTAT in the case of M/s Ultratech Cement vs. CCE, Jaipur-I ruled that remitted portion of the sales tax cannot be included in assessable value since VAT is paid actually at the time of removal of goods.
The bench consisting of Justice (Dr.) Satish Chandra, President, and V. Padmanabhan, Member (Technical) held so while dismissing the appeal of Assessee. In this case Assessee, Ultratech Cement Ltd is the Cement production factory was availing the benefit of Notification No. F.4(72)FD/Gr.IV/81-18 issued by the Government of Rajasthan in relation to the payment of sales tax in respect of the goods in the course of the inter-state trade subject to the condition attached to the Notification.
Consequently, both the authorities below included the amount of such rebate during the disputed period and raised demands with interest and penalties. Aggrieved by this decision Assessee approached CESTAT and the counsel for Assessee argued that the aforementioned notification issued by the state is in the nature of rebate and accordingly the amount of sales tax is not needed to include in the Assessable value of the goods.
The Assessee also argued that they are unaware of the actual amount of rebate which is revealed only at the time of assessment of return, accordingly paid the full amount of sales tax.
On the counterpart, revenue argued that said notification enable only partial exemption and the value determined by the appellant by deducting full rate of CST from the value of the goods was not in accordance with the provisions of Section 4 of the Central Excise Act.
Regarding the issue Assessee relied on the case of Welspun Corporation where bench observed that the case is not applicable to the present issue and observed that the deduction is restricted to the actual VAT paid i.e. at the exempted rate and the question before the tribunal is regarding the extent of VAT deductible under Section 4(3)(d). So the case is not applicable to the present fact.
While reading the definition in section 4(3)(d) of the Act tribunal held that since the VAT is paid actually at the time of removal of goods, the remitted portion of the Sales Tax cannot be included in the assessable value.
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