Job-work valuation must follow the governing assessable value principle; provisional assessments require finalisation under law.

In job-work valuation disputes, the assessable value must follow the governing Supreme Court principle on job-work assessment, and a contrary assumption that job workers are a mere facade cannot justify adopting the principal manufacturer's sale price. On that basis, the Commissioner's valuation approach was set aside, with the resulting demand, appropriation and penalties stated to be unsustainable. Where assessments were provisional, they had to be completed and finalised by the jurisdictional proper officer in accordance with law rather than determined finally in the impugned order. The provisional matters were therefore remanded for completion under the prescribed procedure.

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Issues: (i) Whether the assessable value of goods manufactured through job workers was to be determined on the basis adopted by the Commissioner or on the principle applicable to job-work valuation; (ii) Whether the provisional assessments were required to be remanded for final determination.

Issue (i): Whether the assessable value of goods manufactured through job workers was to be determined on the basis adopted by the Commissioner or on the principle applicable to job-work valuation.

Analysis: The valuation adopted by the Commissioner proceeded on the footing that the job workers were merely a facade and that the facts were identical to those in Pawan Biscuits. The Tribunal held that this approach could not stand because the Supreme Court had itself treated the Pawan Biscuits situation as governed by the Ujagar Prints line of authority. Once that position was accepted, the basis on which the Commissioner rejected the job-work valuation and assessed the goods on the appellants' sale price could not be sustained.

Conclusion: The valuation adopted by the Commissioner was set aside and the demand, appropriation and penalties founded on that valuation could not be sustained.

Issue (ii): Whether the provisional assessments were required to be remanded for final determination.

Analysis: Some of the assessments were provisional, and the Tribunal held that those assessments had to be completed by the jurisdictional proper officer in accordance with law rather than being finally decided in the impugned order.

Conclusion: The provisional assessments were remanded for determination and finalisation according to law.

Final Conclusion: The impugned demand, penalty and recovery directions were set aside, while the matters covered by provisional assessments were sent back for fresh completion in accordance with law.

Ratio Decidendi: In job-work valuation disputes, where the governing Supreme Court principle on assessable value applies, a contrary assumption that the job workers are a mere facade cannot justify adoption of the principal's sale price; provisional assessments must be finalised by the proper officer under the prescribed procedure.

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