Case Details: Commissioner of Central Excise, Mumbai-II Versus Bharat Sanchar Nigam Ltd. (2025) 29 Centax 92 (Tri.-LB)
Judiciary and Counsel Details
- Justice Dilip Gupta, President, S/Shri C.J. Mathew, Member (T) & Ajay Sharma, Member (J)
- Shri Xavier Mascarenhas, Authorized Representative for the Appellant.
- Ms Padmavati Patil, Shri Viraj Reshamwala & Shri Kiran Chavan, Advs. for the Respondent.
Facts of the Case
The assessee, a telecommunication service provider, manufactured telecommunication equipment at its factory. These goods were stock transferred to the branch units of the assessee to be used in providing telecommunication services. The branch units used such equipment to provide telecommunication services to the customers, on which sales tax was paid. A show cause notice was issued to the assessee, alleging that 10% of the cost of production was required to be added to the cost of production under rule 8 of the 2000 Valuation Rules. The matter reached the Larger Bench.
CESTAT Held
The Tribunal held that Rule 8 of the 2000 Valuation Rules provides that where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be 110% of the cost of production or manufacture of such goods. Profits or 110% of the cost of production or manufacture can be added only if the excisable goods are not sold but are used for consumption by the assessee or on his behalf in the production or manufacture of other articles. The Supreme Court in PCC Pole Factory case held that the cost of production or manufacture including profits could be added only if excisable goods were not sold but were used for consumption by the assessee or on their behalf in the production or manufacture of other articles. Accordingly, Rule 8 of the 2000 Valuation Rules would not be applicable in the present case.
List of Cases Cited
- B.S.N.L. v. Commissioner — 2007 (215) E.L.T. 127 (Tribunal) — Approved [Paras 1, 5, 7, 8, 9, 26]
- B.S.N.L. v. Commissioner — Central Excise Appeal No. EDM-457/4, dated 22-11-2007 — Approved [Paras 1, 8, 9, 21]
- Birla Corporation Ltd. v. Commissioner — 2005 (186) E.L.T. 266 (S.C.) — Followed [Paras 27, 30]
- Boving Fouress Ltd. v. Commissioner — 2006 (202) E.L.T. 389 (S.C.) — Relied on [Para 30]
- Commissioner v. Bigen Industries Ltd. — 2006 (197) E.L.T. 305 (S.C.) — Relied on [Para 30]
- Commissioner v. Novapan Industries Ltd. — 2007 (209) E.L.T. 161 (S.C.) — Relied on [Para 29]
- Jayaswals Neco Ltd. v. Commissioner — 2006 (195) E.L.T. 142 (S.C.) — Relied on [Para 30]
- PCC Pole Factory v. Collector — 2003 (158) E.L.T. 429 (S.C.) — Relied on [Paras 5, 8, 9, 17, 20, 21, 22, 24, 25]
