2025 (3) TMI 959

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....on the product subsidy amount and freight subsidy amount during the period March, 2011 to June, 2013. The Adjudicating Authority has confirmed the demand raised in terms of SCN dt.29.10.2013. 2. The issue, in brief, is that the appellants were receiving certain fertiliser subsidy from the Ministry of Chemicals and Fertilisers, Government of India. It was noticed by the department that they were not discharging Central Excise Duty on the said amount of subsidy received from the Government. The department relied on Rule 6 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000, as also on Rule 11 of the Valuation Rules to come to the conclusion that the price includes in addition to the amount charged as price, any amount t....

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....7) ELT 3 (SC)] b) Ranar Agrochem Ltd Vs CCT, Visakhapatnam-GST [2024 (3) TMI 1279 - CESTAT Hyderabad] c) Coramandel International Ltd Vs CCE, C & ST, Visakhapatnam-I [2015 (319) ELT 526 (Tri-Bang)] 5. He further argues that the Circular No. 983/7/2014-CX dt.10.07.2014 makes abundantly clear that subsidy received from the Government by the fertiliser company cannot be subjected to Excise Duty and cannot be loaded to transaction value as additional consideration. He further submits that they are receiving subsidy both on account of product as well as for the freight. However, the sale is only as per the administered price/regulated price fixed by the Government from time to time. 6. On the other hand, learned AR for the department is....

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....bility of Central Excise Duty on subsidy amount given by the Government to the fertiliser company is clearly explained by the Board vide Circular No.983/7/2014-CX, wherein, inter alia, it was clarified that in respect of fertiliser for which subsidy is provided by the Government, Excise Duty will be chargeable on the MRP and not on the subsidy component provided by the Government. We also note that this clarification was issued in view of department issuing SCNs relying on the judgment of Hon'ble Supreme Court in the case of CCE, Mumbai Vs Fiat India Pvt Ltd (supra). We also note that in the SCN, the Adjudicating Authority also relied on the same judgment for drawing her conclusion that subsidy is in the nature of additional consideration, ....