Job-work valuation must follow the Ujagar Prints formula where returned goods are captively consumed without sale.

Where job-worked tin containers are returned to the principal manufacturer and captively consumed without any open-market sale, valuation is not governed by Rule 8 or Rule 10A of the Central Excise Valuation Rules, 2000. The assessable value must instead be determined under the settled Ujagar Prints principle, using the cost of raw materials plus job charges and the job-worker's profit. On that basis, the duty was already discharged, and the demand and penalty could not survive.

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Issues: Whether the valuation of job-worked tin containers captively consumed by the principal manufacturer was governed by Rule 8 or Rule 10A of the Central Excise Valuation Rules, 2000, or by the Ujagar Prints formula based on the cost of raw materials plus job charges including the job-worker's profit.

Analysis: The principal manufacturer did not purchase the goods in the open market but received them back after job-work and consumed them captively. In such a situation, there was no sale for the purpose of applying Rule 8 or Rule 10A. The assessable value had therefore to be determined on the basis of the cost of raw materials together with job charges and profit, in accordance with the settled Ujagar Prints principle. The duty had already been discharged on that basis.

Conclusion: Rule 8 and Rule 10A were inapplicable, and valuation had to be made under the Ujagar Prints formula; the demand and penalty could not stand.

Final Conclusion: The assessment adopted by the appellant was accepted, and the impugned order was set aside with consequential relief.

Ratio Decidendi: Where job-worked goods are cleared back to the principal manufacturer and captively consumed without sale, valuation must be determined on the basis of the cost of raw materials plus job charges and job-worker's profit, not under Rule 8 or Rule 10A of the Central Excise Valuation Rules, 2000.

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