TMI Blog2006 (3) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... jack-up rig cleared to ONGC, Bombay on 13-4-1988 and imposing a penalty of Rs. 25,00,000/- (Rupees twenty five lakhs only) under Rule 173-Q of the Central Excise Rules, 1944. 2. The appellant had cleared one jack-up rig under gate pass dated 13-4-1988 declaring its price as Rs. 45,88,55,418/- and the price list in respect of this item was also got approved at that price. The Superintendent (Preventive) found that the appellant was entitled to a 30% subsidy (20% from the Government of India and 10% from the said customer ONGC) on the sale price agreed under the contract and that the amount was not included in the assessable value declared by the appellant. By including that amount the assessable value would be Rs. 59,65,12,043/- and not th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order on 8-11-1999 allowing the appeal and setting aside the impugned order in so far as it was against the appellant. In the process, the Tribunal held that there was nothing in the contract, which was entered into between the appellant and ONGC in February 1983, to show that over and above the price fixed thereunder any additional consideration flowed directly or indirectly from the ONGC to the appellant. It was held in paragraph 8 of the earlier order of the Tribunal that, subsidy paid by the Central Government to maintain the ship building yards by the appellant, cannot be considered as consideration flowing from the buyer, namely, ONGC to the appellant. It was also observed that except the price paid by ONGC, as per the terms of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includible, was accordingly set aside. It is clear that before the Hon ble the Supreme Court while contending that 10% subsidy was received from the buyer, the appellant had simultaneously contended that the said 10% was included in the price, which fact was denied by the Revenue. It is clear that the appellant had not admitted that 10% subsidy was received over and above the contracted fixed price from the buyer. 6. It has been contended on behalf of the appellant before us that the appellant was not entitled to receive anything beyond the contracted price as subsidy from the ONGC. Reliance was placed in support of this submission on the decision approved by the Committee of Secretaries, Ministry of Petroleum in their meeting held on 19- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ships built in the indigenous Public Sector Shipyards with effect from 1-4-1979, declared that the Government will pay to the shipyards a direct subsidy of 20% of the international parity price and further that the ship owners will pay the shipyards 10% over and above the international parity price towards partial cost of import substitution. 9. Clause 25 of the contract between the appellant and the ONGC in respect of the jack-up rigs provided for a fixed contractual price and its payment in the following terms: - 25.0 Contract Price/Payment 25.1.1 The contract price shall remain firm and fixed until the Contractor completes his obligations under the contract upto and including delivery of the Jack-up Rig at ex-contractor s ya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of which is placed on record. The question whether the contract price arrived at between the appellant and ONGC contained an element of subsidy was also examined. It was conceded by the representative of the Ministry of Petroleum at the meeting of the Inter Ministerial Committee that subsidy at the rate of 20% could be paid to the appellant in respect of the jack-up rigs. However, the approval of the Standing Committee of Secretaries was desired. Thereafter, the question of payment of subsidy to the appellant in respect of two jack-up rigs and one multi-purpose support vessel being fabricated by them from ONGC was considered by the Committee on 3-5-1988, 6-6-1998 and 4-8-1988. A consensus was reached during these meetings in the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 8.36 crores, was decided to be paid to the appellant. It was further decided that, no additional payment would be made by ONGC to MDL (appellant) in view of the fixed price in the contract between the two companies . The above decision was approved by the Committee of Secretaries in the Ministry of Petroleum, in their meeting held on 18-8-1988, a copy of which is at Annexure C to the paper book, which fact is not disputed before us. 11. It is thus evident from the material on record that no amount towards subsidy was paid by the ONGC in view of the decision approved by the Committee of Secretaries and the consensus arrived at during the meetings that the contract in respect of the rigs was to be treated as fixed price contract in l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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