Job-work valuation after amendment to place of removal turns on comparable goods or cost-plus principles under excise rules

The amended definition of "place of removal" was explained as not changing valuation where an independent job worker processes goods and returns them to the supplier. In that setting, the circular stated that valuation should be determined under the Central Excise valuation rules by reference to comparable goods, or, if that is not possible, by cost of manufacture plus notional profit to reach the nearest ascertainable equivalent of the price under the charging provision. The note treats this clarification as governing job-work valuation after the amendment.

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Issues: Whether, after the amendment to the definition of "place of removal", the valuation of goods processed on job-work basis by an independent job worker had to be determined with reference to the circular clarifying the amended position and by applying the valuation principles under the Central Excise law.

Analysis: The amendment to the definition of "place of removal" was considered in the light of the departmental circular clarifying that, where an independent job worker processes goods and returns them to the supplier, the amended places of removal would not alter valuation. The circular further indicated that valuation in such cases is to be worked out on the basis of comparable goods under the relevant valuation rule, or failing that on cost of manufacture plus notional profit, so as to reach the nearest ascertainable equivalent of the price contemplated by the charging provision. The Tribunal accepted that this clarification governed the present dispute.

Conclusion: The valuation contention of the assessee was accepted and the impugned order was set aside.

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