Assessable value of processed fabrics excludes traders' profit and duplicate job-work additions under a binding Board circular.

Processed fabrics cleared on a job-work valuation basis were assessed by applying the Ujagar Prints formula, i.e. cost of raw material plus job charges. A binding Board circular stated that traders' profit was not includible in assessable value, and departmental officers were bound to follow it. On the facts, the assessee had already added a further amount in the assessable value, so additional demands for transportation, loading and unloading, and manufacturing expenses were not sustainable. The disputed additions were therefore held to be not includible, and the Revenue's challenge failed.

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Issues: Whether traders profit and the disputed transportation, loading and unloading, and manufacturing expenses were includible in the assessable value of the processed fabrics.

Analysis: The assessee cleared goods on a job-work valuation basis by adopting cost of raw material plus job charges in terms of the Ujagar Prints formula. The Board circular in Circular No. 619/10/2002-CX. dated 19-2-2002 specifically stated that traders profit was not includible in assessable value, and departmental officers were bound by that circular. The assessee had also already added Rs. 0.75 per metre in the assessable value, so the further demand towards transportation, loading and unloading, and manufacturing expenses was not sustainable on the facts.

Conclusion: The disputed additions to assessable value were held to be not includible and the Revenue's challenge failed.

Final Conclusion: The impugned order was upheld and the Revenue's appeal was rejected on merits.

Ratio Decidendi: A binding Board circular excluding traders profit from assessable value must be followed, and where the assessees valuation already covers the relevant job-work basis, further additions on the same account are not sustainable.

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