Job-work valuation must include chassis transport and insurance costs, while credit-availed duty cannot be added again.

In job-work valuation of body-built vehicles, the assessable value includes transport cost and transit insurance of the chassis, because the raw material value is to be taken at the job worker's premises. Automobile cess is also includible where no CENVAT credit was taken, but an additional basic excise duty component already availed as credit cannot be loaded again. The demand was confined to the normal limitation period because suppression was not established, and penalties were not sustained on the facts.

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Issues: (i) whether, in valuing body-built vehicles cleared by a job worker, transport cost and transit insurance of the chassis had to be added to the assessable value; (ii) whether automobile cess and additional basic excise duty of Rs. 10,000 were includible in the value; (iii) whether the demand was time-barred and penalty was sustainable.

Issue (i): whether, in valuing body-built vehicles cleared by a job worker, transport cost and transit insurance of the chassis had to be added to the assessable value

Analysis: The valuation had to reflect the value of the raw material in the hands of the job worker, not merely the assessable value adopted by the principal for the chassis. The cost of bringing the chassis to the job-worker's premises formed part of that value, and the Tribunal followed the settled position that transportation charges and transit insurance are includible in the job-worker's assessable value.

Conclusion: The transport cost and transit insurance were held includible in the assessable value.

Issue (ii): whether automobile cess and additional basic excise duty of Rs. 10,000 were includible in the value

Analysis: Automobile cess paid on the chassis was not shown to have been availed as credit by the job worker, so it was required to be added. By contrast, the additional basic excise duty of Rs. 10,000 had been taken as cenvat credit by the job worker, and there was no justification for loading the value again with that amount.

Conclusion: Automobile cess was held includible, but the addition of Rs. 10,000 was set aside.

Issue (iii): whether the demand was time-barred and penalty was sustainable

Analysis: The record did not support invocation of suppression to justify the extended period, so the demand could survive only within the normal limitation period. On penalty, the Tribunal found no justification for imposing penalty on either the principal or the job worker in the facts of the case.

Conclusion: The demand was restricted to the normal period of limitation and the penalties were set aside.

Final Conclusion: The valuation was upheld only to the extent of transport cost, transit insurance and automobile cess, while the addition of Rs. 10,000 and the penalties were deleted, resulting in partial relief to the assessee.

Ratio Decidendi: In job-work valuation, the assessable value must include the cost of bringing the raw material to the job worker's premises, but a duty element already taken as cenvat credit cannot be added again to the value.

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