Job-work valuation under excise law cannot create double levy when duty is payable by the principal manufacturer.

For fabrics processed on a job-work basis, excise duty was not to be assessed on the job worker's full assessable value under Section 4 and Rule 6(b) where the governing job-work scheme required the principal manufacturer to discharge duty. The Tribunal followed binding Larger Bench precedent, holding that any contrary assessment would make Rule 57F(4) redundant and result in double levy, once at the job worker's stage and again at the principal manufacturer's stage. The pendency of an appeal before the Supreme Court did not justify disregarding that precedent. The Revenue's appeal was rejected and the Commissioner (Appeals)' order, including deletion of duty demand and penalty, was upheld.

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Issues: Whether, in respect of fabrics processed on job work basis, excise duty was payable by the job worker on the full assessable value under Section 4 of the Central Excise Act, 1944 and Rule 6(b) of the Central Excise (Valuation) Rules, 1975, or whether duty was rightly discharged on the job charges basis as held by the Commissioner (Appeals).

Analysis: The Tribunal noted that the Larger Bench had already held that, in such a job work situation, duty is to be discharged by the principal manufacturer and not by the job worker, because otherwise clause (ii) of Rule 57F(4) of the Central Excise Rules, 1944 would become redundant and the goods would suffer duty twice, once at the job worker's stage and again at the principal manufacturer's stage. The pendency of an appeal before the Supreme Court was held to be no ground for ignoring the Larger Bench ruling.

Conclusion: The appeal by the Revenue was rejected and the order of the Commissioner (Appeals) was upheld; the duty demand and penalty were not sustained against the assessee.

Final Conclusion: The decision affirms that, for job-work clearances governed by Rule 57F(4), duty liability cannot be fastened on the job worker in a manner that results in double levy when the principal manufacturer is the person required to discharge the duty.

Ratio Decidendi: A binding Larger Bench precedent on valuation and job-work liability must be followed unless and until it is displaced, and duty cannot be so assessed as to subject the same goods to double taxation.

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