1991 (1) TMI 279 - AT - Central Excise

Summary

Issues:
- Whether the electric poles manufactured by the appellants are considered "goods" for excise duty purposes.
- Whether the addition of margin of profit to determine the assessable value under the Central Excise Valuation Rules is correct.
- Whether the increase in the margin of profit from 2% to 10% is justifiable.

Analysis:
1. The judgment addressed appeals involving the valuation of goods by a statutory body responsible for electricity generation, transmission, and distribution. The central issue was the correct assessable value of poles used by the body, with disputes over the addition of profit margins and other charges.

2. The appellants argued that they were not the manufacturers of the poles, but rather the contractors were, citing previous judgments and legal provisions. They contended that the poles were not goods subject to excise duty, emphasizing marketability as a crucial factor.

3. The Tribunal examined whether the poles constituted "goods" based on previous decisions and held that they were indeed goods subject to excise duty. This decision was supported by referencing relevant case law, including the Union Carbide India case.

4. The Tribunal considered the application of Central Excise Valuation Rules in determining the assessable value, particularly focusing on the addition of a margin of profit. The appellants argued that profit margins should only be added if there is actual profit, as per the Valuation Rules.

5. The Tribunal reviewed past judgments and determined that the addition of a 2% profit margin was appropriate, rejecting the increase to 10% as unwarranted. The decision was based on the consistent operations of the body and the lack of evidence showing increased profitability or operational changes.

6. The judgment concluded by specifying the outcomes of various appeals, limiting the margin of profit to 2% in most cases. Additionally, miscellaneous applications were granted, and cross-objections were dismissed as not maintainable under the law.

7. Overall, the Tribunal's decision clarified the classification of the poles as goods subject to excise duty, upheld the addition of a 2% profit margin for valuation purposes, and rejected the increase to 10% based on the specific circumstances and lack of evidence supporting such a change.