Job-work valuation excludes trader profit and post-manufacturing expenses when assessable value is computed on declared job charges.

In job-work valuation of processed fabrics, the assessable value includes the grey fabric cost, job charges, and the processor's manufacturing profit and expenses, but excludes the trader's post-manufacturing profit and subsequent selling expenses. Applying Ujagar Prints, the text states that cutting, checking and packing charges were not shown by the Revenue to fall outside the declared job charges, and the respondent's filed declarations remained unchallenged. On that basis, the trader's profit and post-processing expenses were not includible in assessable value, and the Revenue's challenge failed; the discussion also notes that extended limitation was not attracted on the existing record.

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Issues: Whether, in valuation of processed fabrics manufactured on job-work basis, the assessable value was required to include the trader's profit and subsequent expenses such as cutting, checking and packing.

Analysis: The respondent processed grey fabrics supplied by the trader and had filed the prescribed declarations. The valuation was worked out on the basis of the cost of grey fabrics and job-work charges. The governing principle from the settled law in Ujagar Prints is that, for job-work manufacture, the assessable value comprises the value of the raw material in the hands of the processor, the job charges, and the processor's manufacturing profit and expenses, but not the trader's post-manufacturing profits or subsequent selling expenses. The Revenue produced no evidence that the disputed cutting, checking or packing charges were outside the job charges already declared. The record also showed no successful challenge to the declarations filed by the respondent, supporting the plea that extended limitation was not attracted.

Conclusion: The trader's profit and post-manufacturing expenses were not includible in the assessable value. The impugned order was and the Revenue's appeal failed.

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