Job-work valuation follows the principal manufacturer's transaction value; additional charges cannot be added without statutory authority.

For goods manufactured on job-work basis and sold by the principal manufacturer to an unrelated buyer at the time of removal, excise valuation is governed by Rule 10A(i) of the Central Excise Valuation Rules, 2000. The assessable value must be the transaction value of the principal manufacturer's sale, where price is the sole consideration. Charges recovered by the job-worker, including toll, conversion, trial run, or utility charges, are not to be added as additional consideration in the absence of statutory authority. On that basis, the proposed addition to the assessable value was not permissible.

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Issues: Whether, in respect of goods manufactured on job-work basis and sold by the principal manufacturer, the assessable value for central excise duty was required to be taken as the transaction value of the sale made by the principal manufacturer, and whether the charges recovered by the job-worker were liable to be added as additional consideration.

Analysis: The job-worker cleared the goods on the basis of invoices linked to the principal manufacturer's sale invoices, and the duty had been paid on the same transaction value at which the principal manufacturer sold the goods to unrelated buyers. Rule 10A(i) of the Central Excise Valuation Rules, 2000 specifically provides that where job-work goods are sold by the principal manufacturer at the time of removal and the buyer is unrelated and price is the sole consideration, the value shall be the transaction value of the goods sold by the principal manufacturer. On that basis, no further element could be added to the assessable value merely because the job-worker had recovered toll, conversion, trial run, or utility charges.

Conclusion: The demand was unsustainable, and the addition of further amounts to the transaction value was not permissible.

Final Conclusion: The valuation of job-work goods had to be governed by Rule 10A(i), and the duty demand raised on the alleged additional consideration could not be sustained.

Ratio Decidendi: Where job-work goods are sold by the principal manufacturer to an unrelated buyer for a sole consideration, the job-worker must adopt that transaction value for excise valuation and no further amount can be added absent statutory authority.

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