Job-work excise valuation follows the actual manufacturer, not the chassis supplier's later resale price.

In a job-work arrangement, excise duty and valuation attach to the actual manufacturer who carries out the manufacturing process, not to the supplier of the chassis merely because ownership is retained or quality checks are conducted. The independent body builders manufactured the body-built vehicles in their own premises, cleared them on payment of duty, and the valuation at that stage could not be displaced by the later resale price adopted at the regional sales office. Differential central excise duty on the supplier was therefore not sustainable.

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Issues: Whether differential central excise duty could be demanded from the appellant by adopting the resale price of the body-built vehicles sold from the regional sales offices, when the chassis were supplied to independent body builders and the body-built vehicles were cleared on payment of duty by the body builders on landed cost of chassis plus job-work charges.

Analysis: The dispute turned on whether the appellant or the body builder was the manufacturer of the body-built vehicle. The body-building activity was carried out by the independent body builders in their own premises, and the body builders cleared the finished vehicles on payment of duty. The settled position applied in the appellant's own case was that the job-worker who actually undertakes the manufacturing activity is the manufacturer, while the supplier of raw material does not become the manufacturer merely because ownership of the chassis is retained or quality checks are conducted before delivery. On that basis, the valuation adopted at the time of clearance by the body builder could not be displaced by the subsequent resale price at the regional sales office.

Conclusion: The demand of differential excise duty from the appellant was not sustainable. The appellant succeeded on this issue.

Ratio Decidendi: In a job-work arrangement, excise duty liability and valuation attach to the actual manufacturer who carries out the manufacturing process, and not to the supplier of raw material merely because the finished goods are later sold by the supplier from its sales offices.

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