Job-work valuation includes principal-supplied inputs, excludes cum-duty relief, and sustains valuation where lower input price is unproven.

In job-work clearances, assessable value is computed on the cost of all raw materials used plus job charges, so inputs supplied by the principal manufacturer under the cited excise job-work provisions remain includible in value. On that basis, cum-duty reduction was held unavailable for the differential duty computation, and the assessee's challenge to adoption of the highest value for supplied raw materials failed because no evidence showed a lower received price. The valuation adopted by the department was therefore sustained, and the appeal failed in full.

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Issues: (i) whether the cost of inputs supplied by the principal manufacturer under Rule 57F(4) and Rule 57AC(5)(a) of the Central Excise Rules, 1944 was includible in the assessable value of job-work goods; (ii) whether cum-duty benefit was available while computing differential duty; (iii) whether the valuation could be disturbed on the ground that the highest value of the supplied raw materials was adopted.

Issue (i): whether the cost of inputs supplied by the principal manufacturer under Rule 57F(4) and Rule 57AC(5)(a) of the Central Excise Rules, 1944 was includible in the assessable value of job-work goods.

Analysis: For job-work clearances, valuation had to follow the settled principle that assessable value is determined on the basis of the cost of raw materials plus job charges. On that principle, all raw materials used in manufacture form part of the value, and the mere fact that two critical inputs were supplied by the principal manufacturer under the cited rules did not justify exclusion of their cost from assessable value.

Conclusion: The cost of the supplied inputs was rightly includible in the assessable value, against the appellant.

Issue (ii): whether cum-duty benefit was available while computing differential duty.

Analysis: The demand was based on inclusion of the actual cost of raw materials in the value. On that footing, there was no basis to apply cum-duty reduction to the raw material cost component, and no separate deduction was permissible on the facts presented.

Conclusion: Cum-duty benefit was not available, against the appellant.

Issue (iii): whether the valuation could be disturbed on the ground that the highest value of the supplied raw materials was adopted.

Analysis: The appellant did not produce evidence showing that the raw materials received from the principal manufacturer were available at a lower price. In the absence of supporting material, the challenge to adoption of the higher value was not established.

Conclusion: The challenge to the valuation on this ground failed, against the appellant.

Final Conclusion: The valuation adopted by the department was sustained and the appeal failed in its entirety.

Ratio Decidendi: In job-work clearances, the assessable value is to be computed on the cost of all raw materials used plus job charges, and inputs supplied by the principal manufacturer cannot be excluded merely because they were sent under the relevant excise job-work provisions.

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