Job-work valuation excludes notional profit addition where job charges already include manufacturing profit and no extra consideration is shown.

In job-work valuation of excisable goods manufactured from another party's raw materials, assessable value is confined to the cost of raw materials plus manufacturing cost and manufacturing profit already embedded in the job charges. Where the job charges received already include profit and there is no evidence of any additional consideration, no further notional profit addition is warranted. On that basis, a separate 26.04% profit element could not be added, and the declared assessable value based on job charges was accepted in favour of the assessee.

---

---

Issues: Whether, in the valuation of goods manufactured on job-work basis, the assessable value was required to include an additional profit element of 26.04% as reflected in the balance sheet, or whether the job charges already received, which included profit, were sufficient.

Analysis: The goods were manufactured on job-work basis from raw material supplied by another party, with no sale involved. The assessable value for the relevant period was to be determined on cost basis under the valuation rules applicable to central excise. Earlier, the Tribunal had held that in job-work cases the valuation principle is cost of raw materials plus manufacturing cost and manufacturing profit of the job worker, and that where the job charges already include profit and nothing more is shown to be received, no further notional profit addition is warranted. In view of that finding, the later order insisting on adding 26.04% profit could not survive. The objection regarding the method of computing differential profit also became redundant once the declared assessable value was accepted.

Conclusion: The addition of a separate 26.04% profit element was not justified, and the assessable value declared on the basis of job charges was accepted in favour of the assessee.

Ratio Decidendi: In job-work valuation, assessable value is confined to the cost of raw materials plus manufacturing cost and manufacturing profit already embedded in the job charges, and no further notional profit can be added absent evidence of additional consideration.

---