Valuation of job-worked goods: Rule 8 found inapplicable at the interim stage, with partial pre-deposit relief granted.

In valuation of job-worked goods cleared to a principal manufacturer, Rule 8 of the Central Excise Valuation Rules, 2007 was found not prima facie applicable because the finished goods were produced by a job worker from raw material supplied by the principal manufacturer and were not captively consumed by the job worker itself. The conversion charges were treated as already reflecting the job worker's profit, so the interim demand was not justified on that basis. Partial waiver of pre-deposit was granted subject to deposit of Rs. 10,50,000, with recovery stayed for the balance during pendency of the appeal.

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Issues: Whether, in the valuation of job-worked goods cleared to a principal manufacturer, Rule 8 of the Central Excise Valuation Rules, 2007 was prima facie applicable so as to justify the demand and deny waiver of pre-deposit.

Analysis: The finished goods were manufactured by a job worker from raw material supplied by the principal manufacturer. On a prima facie view, this was not a case of captive consumption by the manufacturer itself. The job worker did not further consume the goods in its own manufacturing activity, and the conversion charges already reflected the job worker's profit. In these circumstances, the applicability of Rule 8 was not made out at the interim stage, and the Tribunal followed its earlier decisions on the same valuation question.

Conclusion: Rule 8 was held to have no prima facie application, and the appellant was granted partial waiver of pre-deposit on condition of depositing Rs. 10,50,000, with recovery stayed for the balance during pendency of the appeal.

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