Job work valuation under Rule 10A upheld for bus body fabrication on free-supplied chassis, with duty, interest and penalty sustained.

Fabrication and mounting of bus bodies on chassis supplied free of cost by the chassis manufacturer was treated as job work for valuation under Rule 10A of the Central Excise Valuation Rules, 2000, following an earlier decision on identical facts. On that basis, the valuation method was upheld and the duty and interest demand was found to suffer from no legal infirmity. The Tribunal also found no ground to disturb the consequential penalty, so the demand, interest and penal action remained sustained.

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Issues: Whether the activity of fabricating and mounting bus bodies on chassis supplied free of cost by the chassis manufacturer was to be valued under Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, and whether the demand of duty and interest, along with penalty, could be sustained.

Analysis: The Tribunal found the facts to be identical to an earlier decision dealing with body fabrication and mounting on chassis supplied free of cost by the principal manufacturer. It followed that view and held that the activity fell within the scope of job work for valuation purposes under Rule 10A, rather than being outside its ambit. On that basis, the duty and interest demand were not found to suffer from any legal infirmity. The appeal also did not disclose any reason to interfere with the consequential penal action.

Conclusion: The valuation under Rule 10A was upheld and the demand of duty and interest, together with the penalty, remained sustained; the appeal was rejected.

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