Job worker's retained scrap value cannot be added to assessable value of intermediate products cleared to principal manufacturer

CESTAT Mumbai held that scrap value retained by job worker should not be added to assessable value of intermediate products cleared to principal manufacturer. The tribunal relied on its earlier decision in the appellant's own case, noting no substantial change in law except Rule 10(A) inclusion, which CBEC clarified through circular dated 31.03.2010. Following consistent judicial precedent since P.R. Rolling Mills (2010), the tribunal ruled additional scrap value does not determine final assessable value. Commissioner (Appeals) order was set aside and appeal allowed.

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Issues involved:
Conformation of demand by Commissioner (Appeals) by adding scrap value to assessable value, interest, and penalty.

Facts and Decision:
The Appellant, a manufacturer of iron and steel products, cleared rolled products to input suppliers on job work basis. Dispute arose regarding assessable value determination, with the Department demanding inclusion of scrap value. Multiple Show-cause notices led to confirmed demands, interest, and penalties. Appeals were made to challenge the Order-in-Appeal. Appellant argued for exclusion of scrap value based on judicial precedents and Rule 10A(iii) of Valuation Rules, 2000. The Tribunal referred to past decisions and Circulars, emphasizing that scrap value need not be included in assessable value. Following consistent judicial rulings, the Tribunal allowed the appeals and set aside the Commissioner's order.

Judge's Separate Judgment:
No separate judgment was delivered by the judges.

This judgment by the Appellate Tribunal CESTAT MUMBAI addressed the issue of including scrap value in the assessable value of goods cleared on a job work basis. The Tribunal considered past decisions and Circulars, concluding that the scrap value should not be added to the assessable value. The appeals were allowed, setting aside the Commissioner's order.

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