Valuation of job work yarn requires factual comparability of goods and prices before applying Ujagar Prints

Assessable value of yarn manufactured on a job work basis cannot be determined by mechanically comparing it with yarn manufactured and sold by the assessee on its own account unless factual comparability of the goods and their prices is first established. The Tribunal had proceeded on the assumption that the principle in Ujagar Prints applied, but had not examined whether the two categories of yarn were comparable for valuation purposes. The existing evidence was considered sufficient for that factual inquiry, and the matter was remanded for determination of comparability of the goods and prices.

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Issues: Whether the assessable value of yarn manufactured on job work basis could be determined by comparing it with yarn manufactured and sold by the assessee on its own account, and whether the Tribunal could apply the principle in Ujagar Prints without first deciding factual comparability of the goods and prices.

Analysis: The Tribunal had proceeded on the footing that the principle in Ujagar Prints applied, but had not examined the factual question whether the two categories of yarn were comparable or whether the sale prices were comparable for valuation purposes. The evidence already on record was considered sufficient for the Tribunal to decide those factual aspects on remand.

Outcome: The Tribunal's decision was set aside and the matter was remanded to determine comparability of the goods and the prices on the existing evidence.

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