Custom, Excise & Service Tax Tribunal
Tata Bluescope Steel Limited vs Alwar on 1 August, 2018
1
E/51440/2018-DB
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi - 110 066.
Date of Hearing/Decision: 01.8.2018
Appeal No. E/51440/2018-DB
[Arising out of Order-in-Appeal No.-93-SM-CE-JPR-2018 dated 01/03/2018
passed by the COMMISSIONER OF CGST & CENTRAL EXCISE-Alwar]
TATA BLUESCOPE STEEL LIMITED Appellant
Vs.
C.G.STC & C.E-ALWAR Respondent
Appearance Shri Vivek Sharma, Adv for the appellant Smt. Tamana Alam,(AR) for the respondent CORAM:Hon'ble Mr. Bijay Kumar, Member (Technical) Hon'ble Mrs. Rachna Gupta, Member (Judicial) Final Order No:52704/2018 Per: Bijay Kumar
1. The present appeal arises out of the Order-in-Appeal No. 93(SM) CE/JPR/2018 dated 1/3/2018 vide which the ld. Commissioner (Appeals) confirmed the demand of Rs 6,83,765/- on the issue of inclusion of the VAT subsidy in the assessable value for the purpose of discharge of Central Excise duty under Section 4 of the Central Excise Act, 1994. Accordingly, the Revenue proceeded to include such subsidy amount in the value of the goods cleared by the appellant and demanded the differential duty. Being aggrieved, the appellant has preferred the present appeal.
2E/51440/2018-DB
2. The ld. Advocate Shri Vivek Sharma, has brought before us many judgments including the one passed by this Tribunal wherein it has been held that same is not includable in the assessable value following the judgments of M/s Shree Cement Ltd vs. CCE Alwar 2018- TIOL-748-CESTAT-DELHI wherein it was observed that:-
3. Against this backdrop, we heard Ld. Advocate Shri Vivek Sharma, and Ld AR Smt. Tamana Alam. Both of them agree that the issue is covered by the Final Order No: A/51427-51514/2018-EX (DB) dated 11/4/2018 of this Hon'ble Tribunal. The relevant portion of the order is extracted below:-
"After hearing both sides and on perusal of record, it appears that the identical issue has come up before the Tribunal in the case of Shree Cements Ltd. V/s CCE, Alwar 2018-TIOL-748-CESTAT-DEL where it was observed that:-
7. We have heard both sides at length and perused the appeal record. As out lined above, the appellants are covered by the Investment Promotion Schemes of the Rajasthan Government.
In terms 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 deducted from the transaction value for payment of excise duty. Revenue has taken the view 3 E/51440/2018-DB that payment of VAT using 37B Challans cannot be considered as actual payment of VAT.
8. Both sides have referred to the decision of the Apex Court in the case of Super Synotex India Ltd. In the above decision the Apex Court has categorically held that after 01/07/2000, unless the sales tax/VAT is actually paid to the govt., no benefit towards excise duty can be given in terms of Section 4(3)(d). However, we note that the Tribunal in the case of Welspun Corporation Ltd. (Supra) has distinguished the decision of the Apex Court in the light of Gujarat VAT Act, 2003. In the Welspun Corporation Ltd. case, the assesse had opted for remission of tax scheme under which a portion of the VAT paid was remitted back to the assessee. The Tribunal held that such subsidy amounts are not required to the included in the transaction value.
9. In the present case we know that for the initial period the assessees are required to remit the VAT recovered by them at the time of sale of the goods manufactured. A part of such VAT 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.
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. The remission of tax is thus directly related to capital investment in fixed asset. There was no option to claim exemption from payment of sales tax. The quantum of remission was based upon the investment made in the fixed assets. The condition of the remission amongst others included to remain in production, employment of certain percentage of persons in assessee unit, and numerous other conditions as 4 E/51440/2018-DB brought out in Para 9 of the impugned Order-in- Appeal.
11. By following the decision of the Tribunal in the Welspun Corporation Ltd. case we conclude that there is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans.
12. In the result, the impugned orders are set aside and the appeals are allowed."
4. Hence appeal is allowed following the earlier Final Order No A/51427-51514/2018-EX (DB) dated 11.4.2018 of this Tribunal.
(Dictated and pronounced in open court) (Rachna Gupta) (Bijay Kumar) Member (Judicial) Member (Technical) Tejo