By TIOL News Service

NEW DELHI, AUG 11, 2017: THE assessee-Appellants are providing communication services. For that purpose, they had ‘manufactured' Microwave Tower.

The dispute relates to the applicability of the Rules regarding valuation of the product manufactured by the Appellant which is neither used in the production nor manufacture of final product, but consumed for the purpose of erection of tower.

Rule 11 of the Valuation Rules, 2000 is sought to be applied by the Department and the same is sought to be challenged by the Appellants.

The matter is before the CESTAT.

After extracting rules 8 and 11 of the Valuation Rules, 2000, the Bench remarked -"Since the goods are not consumed in the production or manufacture of other articles, the question of ascertaining the value by referring to the cost of the product or manufacture of such goods would not arise."

Nonetheless, the CESTAT noted that for the subsequent period, in identical facts and circumstances of the case, the Commissioner had granted relief to the assessee-Appellants.

Adverting to the apex Court decision in PCC Pole Factory [5747 of 1997] setting aside the order of the Tribunal enhancing the value of the poles to the extent of ten percent as profit since the PCC Poles were used for transmission of the electric energy and there was no further activity of manufacture and no business was carried out by the Electricity Board, the CESTAT observed that identically, in the instant case, the towers were used by the assessee-Appellants for only transmission of the signals without carrying out any further business activity.

Concluding that there were no reasons to sustain the impugned orders, the same were set aside and the appeals filed by the assessee-Appellants were allowed.

(See 2017-TIOL-2888-CESTAT-DEL)