Job-work valuation under central excise excludes principal manufacturer's post-manufacturing profit and Rule 6 does not apply.

For goods manufactured on a job-work basis, assessable value is determined by the value at which the goods leave the job worker's factory, together with the job worker's profit, under Section 4 of the Central Excise Act, 1944. Post-manufacturing profit in the hands of the principal manufacturer is not part of that assessable value, and the job worker's factory is treated as the deemed factory for valuation. Rule 6 of the Central Excise Valuation Rules, 1975 applies only to captive consumption and does not govern job-work clearances.

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Issues: Whether central excise duty on goods manufactured on job work basis was to be determined by adopting the principal manufacturer's alleged undervalued input price, and whether Rule 6 of the Central Excise Valuation Rules, 1975 applied to such job-work clearances.

Analysis: The assessable value of job-worked goods must be determined with reference to the value at which the goods leave the job worker's factory, together with the job worker's profit, under Section 4 of the Central Excise Act, 1944. Post-manufacturing profit in the hands of the principal manufacturer is not a component of the job worker's assessable value. The factory of the job worker is to be treated as the deemed factory for valuation purposes, and the value already ascertainable under Section 4 cannot be displaced by a different value merely because the principal manufacturer's valuation is disputed. Rule 6 of the Central Excise Valuation Rules, 1975 is confined to captive consumption and is inapplicable to goods manufactured on job work basis.

Conclusion: The duty demand based on the principal manufacturer's alleged undervaluation was unsustainable, and the appellant's valuation on job work basis was correctly adopted.

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