TMI Blog1991 (1) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders. 2. The facts relevant for a decision in these appeals are that the appellants, a statutory body responsible for generation, transmission and distribution of electricity within the State of Andhra Pradesh, require poles which are, in the words of the appellants (Statement of facts, Appeal No. E/483/86-A) made by the Board at its Units through Contractors on contract basis ). These poles are used by the Board for their consumption for various transmission and distribution schemes. The appellants do not sell the poles and, therefore, wholesale price is not available. The value has, therefore, to be arrived at with the help of the Valuation Rules. While doing so, the cost of the poles was taken and margin of profit was being adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable to duty because they are not goods. He further submitted that Rule 6 of the Central Excise Valuation Rules, 1975 does not contemplate the determination of the value of the electric poles as these are not capable of being bought and sold in the market. The learned Advocate extensively referred to the contracts, price lists, tender notices and general conditions to support his plea that the Contractor is independent. He submitted that the appellants have no control except to claim damages and to conduct quality tests. He referred to case law including Union of India v. Union Carbide of India [1978 (2) E.L.T. 1 Allahabad] (reversed in 1986 (24) E.L.T. 169 SC) to argue that goods are goods only if they can ordinarily come to the mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the judgment of the Tribunal in Kerala State Electricity Board, Smt. Baliga submitted that the poles in that matter were made in the contractor s yard whereas in the present case they were admittedly made in the appellant s yard. 6. We have considered the arguments of both sides. 7. The questions that arise for a decision in the matter are as follows : (i) Whether the ratio of the Tribunal s judgment in Kerala Electricity Board (supra) is applicable to the facts of this matter or whether the judgment of the Tribunal in respect of the same appellants (supra) is applicable ? (ii) Whether the electric poles manufactured by the appellants are goods ? (iii) If so, whether addition of margin of profit to arrive at the assessable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectricity Board right from the very beginning was found to be correct, and that is why the Tribunal allowed their appeal. Here the facts are different. Even in the statement of facts in their appeals (Appeal No. 483/83-A), the appellants stated that in the discharge of its duty by distribution of electricity, Board requires poles which are made by the Board at its Units through contractors . It has not been shown to us that it was the case of the appellants at any stage that they were not the manufacturers. On the other hand, what we quoted above shows that they were arguing that they were the manufacturers. Therefore, not only are the facts different here as compared to the facts of Kerala Electricity Board but on the contrary there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion was discussed in detail in Tribunal s Order No. 211-214/84-D, dated. 21-4-1984 and the Bench held that the profit margin added @ 2% was not excessive. Therefore, following the ratio of the said judgment we hold that the addition of profit margin was correct. 11. This brings us to the final question as to whether the increase of margin of profit added to the value, from 2% to 10% is sustainable. The plea advanced was that the appellants do not deal in the poles but use them for discharging their duties in producing and supplying electricity to the people of the State. We have already referred to the earlier judgment of the Tribunal. Earlier too, we observed that the duties of the Board have not changed over a period of years. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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