2014 (8) TMI 775

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.... requirement of pre-deposit is waived and appeal is taken up for final decision. 2. The issue involved is that the Government of India decontrolled Phosphatic and Potassic (P & K) fertilizers with effect from 25 th August 1992 on the recommendations of Joint Parliamentary Committee. Consequent upon the decontrol, the prices of the Phosphatic and Potassic fertilizers registered a sharp increase in the market, which exercised an adverse impact on the demand and consumption of the same. It led to an imbalance in the usage of the nutrients of N, P and K (Nitrogen, Phosphate and Potash) and the productivity of the soil. Keeping in view the adverse impact of the decontrol of the P & K fertilizers, the Department of Agriculture and Cooperation ....

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....e price as sole consideration of sale since it is always less even compared to its cost of production.     (ii)  In the subsidy scheme announced by the Government, the manufacturers of fertilizers received part of consideration from the buyers and the other part of the amount in the form of subsidy from the Government and hence both receipts are interlinked with each other and form part of the 'transaction value'.     (iii) In terms of the definition of 'transaction value' the amount of subsidy received from the Government is part of the transaction value as the sale price fixed by the Government is not the sole consideration for sale and the amount of compensation offered by way of subsidy i....

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....rm part of value which a buyer is liable to pay to the assessee either by reason of sale or in connection with sale himself or on behalf of the assessees. Subsidy paid by the Government cannot be considered as an additional consideration includable for excise duty in accordance with statute. 3. We find that the submissions have to be upheld. In para 4.4 in the Circular referred to by the learned counsel, the Board observed as follows.     "4.4 From the above, it is clear that the facts at hand are clearly distinguishable from the facts and circumstances of the Fiat India case. The manufacturers of fertilizers do not gain any extra commercial advantage vis-a-vis other manufacturers because of the subsidy received from th....