Job-work valuation excludes merchant profit where assessable value is limited to raw material cost, conversion charges and job worker profit.

In job-work valuation of iron and steel products cleared on behalf of a merchant supplier, assessable value is confined to raw material cost, conversion charges and the job worker's profit. The merchant's sale price and profit cannot be added where the goods are processed from merchant-supplied inputs and sold on the merchant's behalf. Applying an earlier Tribunal ruling on identical facts, and noting that it had neither been stayed nor overruled, the Tribunal found no basis to alter the valuation adopted by the job worker. The Revenue's challenge therefore failed and the impugned valuation order was sustained.

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Issues: Whether the assessable value of job-worked iron and steel products cleared on behalf of the merchant supplier had to be determined by including the merchant's sale price or by applying the Ujagar Prints principle of raw material cost, conversion charges and job worker's profit.

Analysis: The goods were processed by the respondents as job workers from raw material supplied by the merchant and were sold on behalf of that merchant. The valuation dispute stood covered by an earlier Tribunal decision on identical facts, which applied the principle that assessable value of processed goods includes only the value of raw material, conversion cost and the job worker's profit, and does not include the profit of the merchant who ultimately sells the goods. As the earlier decision had neither been stayed nor overruled, there was no basis to disturb the order under challenge.

Conclusion: The assessable value could not be loaded with the merchant supplier's profit and the Revenue's appeal failed.

Final Conclusion: The impugned order was sustained and the valuation adopted by the respondents remained undisturbed.

Ratio Decidendi: In job-work valuation, the assessable value is confined to the cost of raw materials, conversion charges and the job worker's profit, and cannot include the merchant's profit when the goods are sold on behalf of the merchant supplier.

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