2026-VIL-1105-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Industrial Promotion Subsidy under Package Scheme of Incentives - Assessable Value, Includability of Subsidy disbursed under the Package Scheme – Appellant received Industrial Promotion Subsidy (IPS) disbursed under the Package Scheme of Incentives 2001/2007 announced by the Government of Maharashtra - Whether Industrial Promotion Subsidy constitutes "additional consideration" and therefore forms part of the assessable value – HELD - The Section 4(3)(d) of the Central Excise Act defines transaction value as the price actually paid or payable by the buyer and expressly excludes sales tax and other taxes actually paid or payable at the point of removal of goods from the factory. The excise duty liability crystallizes at the time of removal when the manufacturer has collected and remitted the tax amounts to the State exchequer, and subsequent receipt of State incentives cannot retroactively alter the transaction value already determined at the time of removal - Furthermore, IPS is a post-sale State subsidy linked to eligible capital investment and regional industrial development, not an amount flowing from the buyer in connection with a sale transaction. The computation mechanism of IPS takes into account VAT/CST paid as one component among several, but this does not transform the subsidy into consideration payable by the buyer. The statutory framework of Section 4 does not permit post-facto revision of transaction value on account of events occurring after removal. It does not flow directly or indirectly from the buyer. Consequently, it falls outside the scope of “transaction value” as defined under Section 4(3)(d) of CEA, 1944 r/w Rule 6 of the Valuation Rules, and cannot be included in the assessable value for the levy of Central Excise duty - The impugned order demanding Central Excise duty is set aside - The appeal is allowed
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