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TMI Blog2017 (4) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation to Section 4(1) of Central Excise Act, 1944 given earlier makes it clear that in case of reimbursement/subsidy / money received from the Ministry, Govt. of India the same will be deemed to include the duty of such goods.. Therefore, the reimbursement/subsidy amount received by the appellant, M/s Hindustan Insecticides Ltd., the manufacturer of subject goods includes the Central Excise duty component also, which is payable to the National Exchequer under the appropriate head of Central Excise Duty. Extended period of limitation - Held that: - demand beyond the period of one year is time barred as the department had the knowledge of the relevant facts - extended period not invocable. The demand for the period of one year (from the relevant date) is sustained along with interest. However, for re-quantification of the liability of the demand and interest and penalty if any, the matter is remanded to the adjudicating authority - appeal partly allowed by way of remand. - E/1432/2011-DB - A/52633/2017-EX[DB] - Dated:- 30-3-2017 - Dr. Satish Chandra, President And Mr. Ashok K. Arya, Member ( Technical ) Shri Amit Jain, Advocate - for the appellant Shri H.C. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the individual buyer. Therefore, it cannot be concluded that the subsidy is an additional consideration flowing from the buyer to the manufacturer. (vi) Reliance is also placed on the following cases : (a) Coramandel Internation Ld. Vs. CCE ST. Visakhapatnam-I 2015 (319) ELT 526 (Tri.-Bang.); (b) Oil and Natural Gas Corporation Ltd. Vs. CCE, Surat - 2015 (320) ELT 614(Tri.-Ahmd.) 5. The ld. AR for the Revenue reiterated the contents of the impugned order. 6. After careful consideration of the facts and submissions of both the sides, it appears that the appellant manufacturer claims that the subsidy is having no connection with the manufacture and supply of DDT. However, this claim of the appellant is not based on the fact on the ground. The impugned order quotes from the decision taken by the Committee of Secretaries for the rehabilitation of the appellant unit, where the decision is mentioned as below: (i) The existing formula used by the Cost Accounts Branch of Ministry of Finance would continue to be used for calculating the return on DDT. (ii) Ministry of Finance would make a provision for subsidy of ₹ 5 crore per annum to Min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price-cum-duty, excluding sales tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods.) . The Explanation appearing in Section 4(1) of the Central Excise Act, 1944 (which has been reproduced above) says that price actually paid and money value of the additional consideration, if any, for the subject goods received directly or indirectly from the buyer by the assessee shall be the price-cum-duty of the excisable goods. In other words, whatever is the total consideration received by the assessee for the subject goods (DDT) which has been received directly or indirectly from the buyer (including from the Ministry, Govt. of India as subsidy) will be the price- cum-duty where sale tax and other taxes, if any, actually paid, will be excluded and such price-cum-duty shall be deemed to include the duty payable on such goods. In terms of the contents of the Explanation to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said product SKO the assessee was receiving subsidy or differential amount from the pool account as a compensation, CESTAT has held that Central Excise duty is chargeable on the subsidy component or differential amount also, but with the benefit of the cum duty price. The CESTAT in the said decision inter alia observes as under: 6.2.4 It is to be noted that the provisions of Section 4(1)(a) of the Central Excise Act, 1944, require the following three conditions to be satisfied: (i) The sale of the goods by the assessee for delivery at the time and place of removal; (ii) The assessee and the buyer are not related; and (iii) Price is the sole consideration for sale. Here, if we consider the transaction of sale by the respondents to their buyers under PDS, we find that the 3rd condition price is the sole consideration for sale is not completely satisfied as subsidized price on which the goods are delivered to buyer is not the sole or only consideration for the said goods. The assessee is receiving additional consideration in the form of reimbursement from the Oil Pool Account. Therefore, the Revenue refers to Rule 6 of the Central Excise Valuation (Determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee. This Rule 6 makes the position further clear that the value of the goods (DDT) shall be deemed to be the aggregate of the subsidized price and the reimbursement or subsidy money (differential price/subsidy being received from the Ministry by the appellant). This aggregate is the actual value on which Central Excise duty is chargeable as this is the consideration which is flowing directly or indirectly to the appellant. The Explanation to Section 4(1) of Central Excise Act, 1944 given earlier makes it clear that in case of reimbursement/subsidy / money received from the Ministry, Govt. of India the same will be deemed to include the duty of such goods.. Therefore, the reimbursement/subsidy amount received by the appellant, M/s Hindustan Insecticides Ltd., the manufacturer of subject goods includes the Central Excise duty component also, which is payable to the National Exchequer under the appropriate head of Central Excise Duty. 11. The appellant s submission that subsidy money received from the Ministry c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtilizers clarifies that on the subsidy component of the fertilizer, Central Excise duty should not be charged. It is made clear that this circular is only for the commodity fertilizers , and further it is made clear again that CBEC Circular or any clarification cannot override the provisions of Section 4(1) of Central Excise Act and Rule 6 of Central Excise Valuation Rules. This circular therefore does not provide required force to support the submissions of the assessee appellant. The case laws cited by the assessee are also not applicable for the present facts for the reasons and discussions made above. 11.3 The assessee submits that if the demand is held sustainable they should be given the benefit of cum duty, considering the subsidy received as inclusive of the excise duty payable. This submission of the appellant is acceptable, when the assessee has got the subsidy as extra consideration and when there is no further scope to recover any other amount under the head of the excise duty from their customer. Further, in the light of discussions made in earlier paras, the assessee is entitled to cum duty price benefit in case of the extra consideration (subsidy) received by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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