Job-work valuation follows settled assessable value principles, with buyer's overheads and profit excluded in principal-to-principal dealings.

Job-work clearances are valued by applying the settled principles for assessable value under the relevant valuation regime. For the pre-1.7.2000 period, the comparable goods and residuary valuation framework under Rule 7 read with Rule 6(b) of the 1975 Valuation Rules was considered in line with the principle that job-work goods are valued on job charges plus input cost, without adding the buyer's overheads or profit where the parties deal on a principal-to-principal basis. The later valuation rules and circulars were stated not to alter that approach after 1.7.2000, and valuation methods are to converge to a common, reasonable assessable value.

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Issues: Whether the assessable value of goods manufactured on job-work basis was to be determined by the comparable goods method for the period prior to 1.7.2000 and by the cost-based method under the later valuation regime, and whether the assessee's valuation was correct.

Analysis: The valuation of job-work clearances was held to be governed by the principles earlier settled by the Supreme Court and reiterated in the Board's circulars. For the pre-1.7.2000 period, the residuary valuation approach under Rule 7 read with Rule 6(b) of the 1975 Valuation Rules was examined in the light of the settled principle that job-work goods are to be valued on the basis of job charges together with the cost of inputs, without including the buyer's overheads or profit where the dealing is on a principal-to-principal basis. The later circulars clarified that the new valuation rules did not depart from those principles after 1.7.2000. The Tribunal also relied on the principle that valuation methods must converge to a common and reasonable assessable value.

Conclusion: The assessee's method of valuation was held to be correct and in accordance with law.

Final Conclusion: The duty demand did not survive and the appeal succeeded on the valuation issue.

Ratio Decidendi: In job-work clearances, assessable value is to be determined by applying the settled job-work valuation principles consistently under the relevant valuation rules, without loading the buyer's expenses or profit where the parties deal on a principal-to-principal basis.

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