1. This appeal is against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). Briefly stated, the facts are as follows:

The respondents have a shipbuilding yard. It would appear that they had entered into contract with ONGC for manufacture and supply of jack up rigs. The price shown in the contract was the sum of Rs 41.80 crores per rig. The respondents have filed a price list dated 29-3-1988 which shows the price of one rig to be Rs 45,88,55,418.00, the difference being due to fluctuation in foreign exchange rate. This price list was approved on 15-4-1988. The respondents were also regularly filing RT - 12 form. The respondents paid the excise duty on rigs taking the value of one rig at Rs 45,88,55,418.

2. On 15-3-1990, they were issued a show cause notice inter alia alleging suppression of the actual price of rigs for the purposes of excise duty. It was claimed that over and above the price shown in the contract, the respondents were also entitled, as per the policy of the Government, to receive a subsidy of 20% from the Government and 10% from ONGC. It was claimed that this 30% formed part of the price and excise duty was payable thereon. The contention of the respondents that they had already included 10% (received from ONGC), as well as their contention that 20% price received from the Government were not included, were not accepted. By an order dated 29-11-1991, they were directed to pay the differential duty as well as penalty. By the said order the contention regarding the limitation was also rejected.

3. The respondents carried the matter in appeal to the Tribunal. The Tribunal has by the impugned judgment held that 30% subsidy cannot and does not form part of the price. The Tribunal has also relied on a judgment of this Court in the case of CCE v. Cotspun Ltd. (1999 (7) SCC 633 [LQ/SC/1999/927] ) and held that the differential duty could not be claimed after a lapse of two years. By the impugned order the Tribunal has rejected the additional plea raised by the respondents that no excise duty was payable on the goods as the rigs were exported out of India. The respondents have not come in appeal against this part of the order. Hence this finding stands concluded.

4. The first question for consideration is whether 30% subsidy i.e. 20% from the Government and 10% from ONGC is includible in the price of the goods for the purposes of excise duty.

5. The relevant portion of S.4 (Central Excise Act, 1944) as it then stood read as follows:

"4. Valuation of excisable goods for purposes of charging of duty of excise.-(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value, shall, subject to the other provisions of this section, be deemed to be-

(a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale:"

6. R.5 (Central Excise) then in force read as follows:

"5. Where the excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of S.4 of the except that the price is not the sole consideration, the value of such goods shall be based on the aggregate of such price and the amount of the money value of any additional consideration flowing directly or indirectly from the buyer to the assessee."

Thus under S.4 read with R.5 in cases like the present where price was not the sole consideration the amount in money value of any additional consideration is includible in the value. However, the additional consideration must be directly or indirectly from the buyer to the assessee. In this case it is to be seen that the subsidy was as per the policy of the Government. The subsidy of 20% was paid by the Government. 10% was paid by the buyer. In our view the subsidy of 20% from the Government cannot be said to be additional consideration as it is not received from the buyer either directly or indirectly. Therefore, that would not be includible in the price of the goods for the purposes of excise duty. However, it is an admitted position that 10% subsidy was received by the respondent from the buyer. It is therefore additional consideration received by the respondent from the buyer. The fact that it is received under a policy of the Government does not detract from the above position. It is therefore includible. The judgment of the Tribunal holding that the entire subsidy (including the 10%) is not includible, is not correct and is set aside.

7. The respondents have contended that 10% subsidy was included in the price. The appellants deny this. The Tribunal has not looked into this aspect at all. We find that there is also contention regarding limitation. Apart from referring to the Cotspun (1999 (7) SCC 633 [LQ/SC/1999/927] ) judgment the Tribunal has not satisfactorily dealt with the aspect of limitation. The Tribunal has not considered the fact that since the Cotspun (1999 (7) SCC 633 [LQ/SC/1999/927] ) judgment S.11A has been amended. Thereafter the judgments of this Court in the cases of Dugar Electronics v. CCE (2003 (1) SCC 188 [LQ/SC/2002/1217] ) and ITW Signode India Ltd. v. CCE (2004 (3) SCC 48 [LQ/SC/2003/1182 ;] ) have explained Cotspun (1999 (7) SCC 633 [LQ/SC/1999/927] ) judgment. In our view this aspect must also be reexamined by the Tribunal.

8. We, therefore, set aside the impugned judgment and remit the matter back to the Tribunal for examination of these two aspects only.

9. The appeal stands disposed of accordingly. No order as to costs.