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of <h1>Appellate Tribunal Upholds Assessable Value Calculation for Job-Worked Products</h1> <h3>COMMISSIONER OF C. EX., SALEM Versus SRI VENKATESWARA STEEL INDUSTRIES</h3> The Appellate Tribunal upheld the lower authority's determination of the assessable value of re-rolled products manufactured on a job work basis, ... Valuation (Central Excise) - Job work Issues: Assessable value determination for re-rolled products manufactured on job work basis.In this case, the main issue revolves around the correct determination of the assessable value of re-rolled products manufactured on a job work basis using M.S. Ingots supplied by the customer. The dispute arises from the consideration of burning loss or 'invisible loss' during the conversion process and its impact on the assessable value. The key question is whether the assessable value was correctly determined by the lower appellate authority, which considered the job worker's contention regarding the quantity of ingots and the value of scrap generated during the manufacturing process.The Appellate Tribunal, after examining the records and hearing the ld. SDR, found that the assessable value determination hinged on the treatment of 'invisible loss' and its inclusion in the final cost of the manufactured product. The Tribunal referred to a Supreme Court judgment in Ujagar Prints v. Union of India, which established the formula for determining the assessable value of job-worked products as raw material cost plus job work charges. This formula necessitates the inclusion of the entire cost of raw material in the assessable value. Consequently, the original authority's determination of the assessable value in line with this formula was deemed correct. The Tribunal upheld this approach, emphasizing that once the cost of raw material is adopted for constructing the final product cost, deduction on account of 'invisible loss' cannot be permitted.Ultimately, the Tribunal set aside the impugned order and allowed the appeal in favor of the Department. The decision highlights the significance of adhering to established formulas for assessing the value of job-worked products and underscores the principle that the entire cost of raw material should be factored into the assessable value calculation. This judgment clarifies the treatment of 'invisible loss' in determining the assessable value of manufactured products and provides guidance on ensuring consistency and accuracy in such assessments.
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