Central excise valuation excludes post-clearance job work costs when goods are assessed at the factory gate.

Central excise valuation depends on the value of goods at the place of removal, i.e. the condition in which they are cleared from the factory. Post-clearance bullet proofing carried out outside the factory by an independent job worker was not part of the assessable value, because later value addition at a separate premises did not alter the valuation basis under Section 4. The fact that the buyer and processing unit belonged to the same group did not justify inclusion of that later cost. The Revenue's demand was therefore unsustainable, and exclusion of the job worker's post-clearance activity from assessable value was affirmed.

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Issues: Whether the assessable value of bullet proof vehicles cleared from the factory had to include the cost of bullet proofing carried out later by an independent job worker outside the factory.

Analysis: Valuation under Section 4 of the Central Excise Act, 1944 depends on the value at the place of removal. The goods must be assessed in the condition in which they are cleared from the factory, and separate registration of premises reinforces that each factory or premises is to be treated as a distinct place of removal. Where a further process is undertaken after clearance outside the factory, and that process does not alter the legal basis of valuation under Section 4(1)(a), the department cannot add that later value addition merely because the buyer and the processing unit belong to the same group. The Board circular and the cited legal provisions supported exclusion of the job worker's post-clearance activity from the assessable value.

Conclusion: The cost of bullet proofing done after clearance by the job worker was not includible in the assessable value; the Revenue's demand was unsustainable.

Final Conclusion: The order setting aside the duty demand was upheld and the Revenue's appeal failed.

Ratio Decidendi: For central excise valuation, only the value of goods as cleared from the factory at the place of removal is relevant, and post-clearance value addition carried out outside the factory by an independent job worker is not includible in assessable value unless the statutory valuation scheme so requires.

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