Comparable-goods valuation governs job-worked goods when market value is known; cost construction applies only if no comparable value exists.

In valuing goods manufactured on a job-work basis, the assessable value is to be determined by reference to comparable goods where their value is available; the cost construction method, including job charges, applies only when no comparable value is known. On the facts, the job worker cleared textured yarn on the principal manufacturer's price basis, and the declared value of comparable goods was higher than the value adopted by the job worker. The challenge to reliance on the comparable-goods method therefore failed, and the demand was held unsustainable.

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Issues: Whether, in valuing goods manufactured on job work basis, the assessable value was required to be determined on the basis of comparable goods sold by the principal manufacturer or by applying the cost construction method including job charges.

Analysis: The valuation of goods manufactured on job work basis was held to depend on the availability of the value of comparable goods; where such value is known, it is to be adopted, and the cost construction method is confined to cases where comparable value is not available. The record showed that the job worker cleared the textured yarn on the basis of the principal manufacturer's price, and that the declared price of comparable goods was higher than the value adopted by the job worker. The departmental challenge to the first appellate authority's reliance on the comparable-goods method therefore failed, and the prior unchallenged view on identical facts also supported the assessee's position.

Conclusion: The assessable value was rightly determined on the basis of comparable goods and not on the cost construction method; the demand was unsustainable.

Final Conclusion: The Revenue's challenge failed and the order in favour of the assessee was sustained.

Ratio Decidendi: In valuation of job-worked goods, the value of comparable goods prevails where it is known, and the cost construction method applies only when no comparable value is available.

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