Job-work excise valuation must reflect manufacturing cost and job charges, not the supplier's downstream sale price.

For goods manufactured by a job worker, central excise valuation is confined to the cost of raw material, job-work charges, manufacturing expenses and manufacturing profit; the supplier's later sale price or any depot-based downstream price cannot be used as the assessable value. Applying that principle to fabrication of bodies on duty-paid chassis, the valuation could not be based on the chassis supplier's sale price. The demand was therefore unsustainable and the assessee's appeal succeeded.

---

---

Issues: Whether, in the case of a job worker fabricating body on duty-paid chassis supplied by the raw material supplier, the assessable value for central excise duty could be taken as the sale price at which the finished vehicle was sold by the supplier of the chassis.

Analysis: The body builder received duty-paid chassis for fabrication of the motor vehicle body and cleared the finished vehicles under the relevant exemption notification. The applicable valuation principle for goods manufactured by a job worker is that the assessable value is confined to the cost of raw material, the value of the job work, manufacturing expenses, and manufacturing profit. Subsequent sale price of the raw material supplier or any post-manufacture depot-related price cannot form the basis for valuation. The same principle had already been applied in the appellant's own matter, and the cited valuation rules support valuation on the basis of manufacturing cost and, where necessary, comparable goods.

Conclusion: The demand based on the sale price of the chassis supplier was not sustainable, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: For goods manufactured by a job worker, excise valuation must be based on the manufacturing cost and related job-work elements, not on the subsequent sale price of the supplier or downstream depot price.

---