Assessable value in job work: retained waste and scrap need not be added absent proof of separate unaccounted consideration.

Retained waste and scrap held by a job worker did not require separate addition to assessable value under section 4 of the Central Excise Act, 1944 where finished goods were cleared on the value fixed by the principal and that value already reflected the transaction components. The Tribunal found no evidence of a distinct unaccounted job-work consideration attributable to the retained waste and scrap, and followed its earlier view in Surindra Steel Rolling Mills, as affirmed by the High Court. On that basis, the demand was not sustainable and the order dropping the demand was upheld, leaving no ground for interference in the Revenue's appeal.

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Issues: Whether the value of waste and scrap retained by a job worker, while clearing finished goods on the value fixed by the principal, forms part of the assessable value under section 4 of the Central Excise Act, 1944.

Analysis: The goods were cleared on the value fixed by the principal for its customers, and that value was treated as having accounted for all components entering into the price, including the waste and scrap retained by the job worker. The record did not show suppression of any separate job-work consideration to the extent of such waste and scrap. The Tribunal followed its earlier view in Surindra Steel Rolling Mills, which had also been affirmed by the High Court.

Conclusion: The retained waste and scrap did not warrant any separate addition to the assessable value, and the Revenue's challenge failed.

Final Conclusion: The impugned order dropping the demand was sustained, leaving no basis for interference in the Revenue's appeal.

Ratio Decidendi: Where finished goods are cleared on the value fixed by the principal and that value already reflects the components of the transaction, retained waste and scrap does not constitute a separate addition to assessable value absent evidence of a distinct unaccounted consideration.

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