Post-clearance processing outside the factory cannot be added to assessable value when it does not amount to manufacture.

Bullet-proofing carried out after clearance of a base vehicle by an independent job worker outside the factory was not includible in the assessable value for central excise. The valuation rule applied was that duty is chargeable on goods as cleared from the factory at the place of removal, and post-clearance processing that does not amount to manufacture cannot be added to assessable value. The Tribunal followed its earlier view in the same appellant's matter and treated the statutory valuation scheme and Board circular as supporting exclusion of such charges; the demand and penalty were therefore unsustainable.

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Issues: Whether the value of bullet-proofing carried out by an independent job worker outside the factory could be included in the assessable value of the base vehicle for central excise duty.

Analysis: The base vehicle was cleared from the manufacturer's factory on payment of duty and the bullet-proofing process was undertaken subsequently by an independent job worker. The governing valuation principle was that excise duty is to be assessed on the goods as cleared from the factory at the place of removal, and where the goods undergo a further process outside the factory which does not amount to manufacture, the cost of such post-clearance processing cannot be added to the assessable value. The Tribunal applied the earlier view already taken in the appellant's own case and treated the Board's circular and the statutory valuation scheme as supporting the same result.

Conclusion: The bullet-proofing charges were not includible in the assessable value, and the demand and penalty could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal succeeded.

Ratio Decidendi: For excisable goods cleared from a factory, post-clearance value addition carried out by an independent job worker at another premises, when it does not amount to manufacture, cannot be added to the assessable value under the central excise valuation scheme.

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