The Delhi bench of Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that VAT Subsidy can’t be included in the assessable value. The bench including Justice (Dr) Satish Chandra President and V. Padmanabhan Member (Technical) heard the case of appellant called M/s Shree Cement Limited against the order of CCG & ST.
The Appellants have their factories in Rajasthan state under Rajasthan Investment Promotion Scheme, notified by the government with the objective of making the investment in new enterprises. The Appellant need to pay VAT/CST/SGST at an applicable rate and the company was eligible for subsidies under various schemes of Government when the scheme notified then the appellant entitled to the subsidy.
However, Revenue entertained a view that the VAT liability discharged for utilizing the investment subsidy granted in form 37B cannot be considered as VAT actually paid, for the purpose of Section 4 of the Central Excise Act, 1944. Accordingly, revenue added the subsidy amount and demanded the duty with interest and penalty.
Being aggrieved with the action of Revenue Assessee challenged the demand before this tribunal through an appeal. The tribunal bench heard Vivek Sharma, Counsel for the appellant as well as M. R. Sharma, AR for the Department.
While allowing the appeal, the bench said that Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid.Subscribe Taxscan AdFree to view the Judgment