Job-work valuation excludes post-clearance freight and unrelated hundi discount from assessable value.

For job-worked goods cleared at the factory gate, outward freight incurred after clearance is not part of assessable value, so post-clearance transportation charges are excluded. A hundi discount arising from a financing arrangement between the buyer and its banker, where the job worker is not privy to the arrangement and receives only the discounted sale price, is also not an additional consideration. On those principles, the valuation additions were rejected, the impugned orders were set aside, and the appeals succeeded with consequential relief.

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Issues: (i) Whether outward transportation charges were includible in the assessable value of goods cleared by a job worker; (ii) Whether hundi discount given to the principal manufacturer was an admissible deduction from assessable value.

Issue (i): Whether outward transportation charges were includible in the assessable value of goods cleared by a job worker.

Analysis: The goods were cleared from the factory gate and the outward freight was incurred after clearance. In valuation of job-worked goods, assessable value is confined to the cost of raw material, processing charges and the job worker's profit at the factory gate. Since the transportation charge was post-clearance, it could not form part of the assessable value on the facts of the case.

Conclusion: Outward transportation charges were not includible, and the demand on that count was set aside.

Issue (ii): Whether hundi discount given to the principal manufacturer was an admissible deduction from assessable value.

Analysis: The discount arose from the financial arrangement between the buyer and its banker, to which the job worker was not privy. The assessee received only the discounted sale price, and the buyer's interest obligation did not confer any monetary benefit on the assessee. The amount therefore did not represent any additional consideration forming part of the assessable value.

Conclusion: Hundi discount was an admissible deduction and the demand on that count was set aside.

Final Conclusion: The valuation additions were rejected, the impugned orders were set aside, and the appeals succeeded with consequential relief.

Ratio Decidendi: For job-worked goods, post-clearance outward freight is not part of assessable value, and a buyer-bank financial charge or discount not received by the assessee and unconnected with the assessee's sale consideration cannot be added to assessable value.

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