Comparable-goods valuation governs job-work clearances when identical market goods exist; residual cost method applies only if unavailable.

Valuation of job-work clearances depends first on whether comparable goods are available. Where the assessee manufactures identical goods on its own account and sells them in the market, Rule 6(b)(i) requires valuation by the comparable-goods method; the residual cost-based method under Rule 6(b)(ii) applies only if that primary method is inapplicable. The authorities had not verified whether the own-manufacture and job-work goods were truly identical and comparable, so fresh factual examination was required before choosing the valuation basis. The dispute was therefore remanded for reconsideration of the proper assessable value on that footing.

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Issues: Whether the assessable value of goods manufactured on job-work basis had to be determined under the comparable-goods method when identical goods manufactured and sold by the assessee in the market were available, or whether valuation could proceed on cost basis under the residual rule.

Analysis: Rule 6(b)(i) applies where the value of comparable goods is available, and recourse to Rule 6(b)(ii) is permissible only when the former is inapplicable. The assessee's case was that it manufactured identical steel ingots on its own and sold them in the open market, making a comparable market value available for job-work clearances. The authorities below rejected this contention without examining whether the goods manufactured on own account and on job-work basis were in fact identical and comparable. In such circumstances, the matter required factual verification before the proper valuation method could be applied.

Conclusion: The matter was remanded for fresh examination of whether comparable goods were available and, if so, for valuation under Rule 6(b)(i) rather than cost-based valuation under Rule 6(b)(ii).

Final Conclusion: The assessee obtained a remand for reconsideration of the valuation dispute, and the earlier demand and penalty were not finally sustained by the order.

Ratio Decidendi: Where comparable goods manufactured and sold by the assessee are available, valuation must be undertaken under the comparable-goods method and the residual cost-based method can be used only when that primary method is not applicable.

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