2026 (8) TMI 1065

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....EXCUS-002-APP-117-16-17 dated 28.02.2017, whereby, the Learned Commissioner (Appeals), upheld the Order-in-Original dated 20.05.2014 confirming Central Excise Duty amounting to Rs. 4,39,213/-, along with applicable interest and penalty of Rs. 1,00,000/-, for the period from April, 2013 to December, 2013. 2. The brief facts of the case are that the appellant is engaged in the manufacture of fertilizers, namely Single Super Phosphate, and was discharging Central Excise Duty on the goods manufactured and cleared by it. The appellant was also receiving subsidy from the Government of India under the Nutrient Based Subsidy Policy (NBS) administrated by ministry of Chemicals and Fertilizers. 3. The appellant did not include the amount of suc....

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....es for valuation of Excise goods on the basis of transaction value where the assessee and the buyer are not related and price is the sole consideration for sale. Rule 6 of the Central Excise Valuation Rules, 2000 deals with a situation where price is not the sole consideration and contemplates addition of the money value of additional consideration directly or indirectly from the buyer to the assessee. 9. Thus, the essential requirement for invoking Rule 6 is that there must be an additional consideration which flows, directly or indirectly, form the buyer to the manufacturer. An amount received independently from a third party, particularly from the Government under a policy or subsidy scheme, cannot automatically be treated as addition....

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....ion of the excisable goods. The distinction is important. Where the amount is paid by the buyer, even if described as subsidy or under a Government - sponsored arrangement, the question of its inclusion may arise. However, where the subsidy is independently paid by the Government and does not emanate from the buyer, the necessary ingredient of "additional consideration flowing directly or indirectly from the buyer" is absent. This distinction is also apparent from the principle discussed in Mazagon Dock Ltd., supra. 11. The same principle has subsequently been followed in cases holding that Government subsidy or incentive which does not flow from the customer cannot be included in the assessable value merely on the ground that the manufa....