Job-work valuation must reflect factory-gate value under alternative methods, with both routes leading to the same assessable value.

Valuation of soap manufactured on job-work basis is to reach the factory-gate value on the date of removal, whether assessed by cost construction or by deduction from the trader's price. The Constitution Bench ruling in Ujagar Prints and the later clarificatory order treat Rule 6(b)(2) and Rule 7 as alternative routes to the same assessable value, namely the nearest equivalent of normal price under Section 4 of the Central Excise Act, 1944. Where there is no material dispute on quantity, deductions, or quantum, a challenge confined to the rule applied does not disturb the valuation. The appellate authority's valuation was sustained and the Revenue's appeal was rejected.

---

---

Issues: Whether the assessable value of soap manufactured on job-work basis was to be determined under Rule 6(b)(2) or Rule 7 of the Central Excise (Valuation) Rules, 1975, and whether the valuation adopted by the appellate authority was sustainable.

Analysis: The issue of valuation of goods manufactured on job-work basis stood settled by the Constitution Bench decision in Ujagar Prints and the subsequent clarificatory order. The applicable principle was that whichever method is used, whether cost construction or deduction from the trader's price, the result must be the value of the goods at the factory gate on the date of removal. The two methods are only alternative routes to reach the same assessable value. In the present matter, there was no material showing any real dispute on quantity, deductions, or quantum, and the challenge to the valuation was only to the rule applied. The valuation exercise had to achieve the nearest equivalent of normal price under Section 4 of the Central Excise Act, 1944.

Conclusion: The valuation adopted by the appellate authority was sustained and the Revenue's appeal was rejected.

---