Job-work valuation must follow Ujagar Prints cost-plus principles, not the principal's sale price or unrelated comparable sales.

Job-work clearances are valued on the settled Ujagar Prints basis, namely the cost of raw materials plus conversion charges and the job-worker's profit. A principal's sale price or a higher price realised from sales to a different class of buyers cannot be imported where it does not reflect the correct job-work valuation method. On that basis, the appellant's valuation was accepted as lawful and correct, and the demand and penalties were set aside.

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Issues: Whether the assessable value of job-work goods was to be determined on the basis of the principal's sale price or under the valuation principle laid down in Ujagar Prints by taking the cost of raw materials plus job charges including the job-worker's profit.

Analysis: For job-work clearances, the settled rule is that assessable value comprises the cost of raw material and conversion charges with the job-worker's profit. The value adopted by the appellant, based on the principal's sale price, was found to be lower than the value that would arise on application of that principle. The attempt to adopt the price of goods sold to independent buyers as a comparable price was rejected, since prices may validly differ between distinct classes of buyers and the cited comparable-goods approach did not govern this valuation dispute.

Conclusion: The valuation adopted by the appellant was held to be legal and correct, and the demand and penalties were set aside.

Ratio Decidendi: In valuation of job-work goods, the assessable value is to be determined by the cost of raw materials plus job charges and the job-worker's profit, and a higher price charged to a different class of buyers cannot be imported as the assessable value where it does not reflect the correct job-work valuation basis.

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