Job work valuation principle continues: Rule 8 does not apply to job work clearances after 1-7-2000.

Rule 8 of the Central Excise Valuation Rules, 2000 did not apply to goods manufactured on job work for a buyer after 1-7-2000, because that rule covers only goods not sold by the assessee and used by him or on his behalf in the manufacture of other articles. Job work clearances were not captively consumed by the assessee, so the settled valuation principle continued to govern. The Board's circular and the scheme of Rule 11, read with Supreme Court precedent, confirmed that assessable value remained cost of materials plus job charges. On that basis, the duty demand could not be sustained.

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Issues: Whether goods manufactured on job work basis after 1-7-2000 were liable to valuation under Rule 8 of the Central Excise Valuation Rules, 2000, or whether their assessable value continued to be governed by the settled job work valuation principle.

Analysis: Rule 8 applies only where excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles. Goods manufactured on job work basis for a buyer do not fall within that category, as they are not captively consumed by the assessee. The Board's circular clarified that the introduction of the 2000 Valuation Rules did not change the settled position laid down by the Supreme Court for job work goods. The applicable method therefore remained the cost of materials plus job charges, in line with the earlier valuation principle and the scheme of Rule 11 read with the established Supreme Court decisions.

Conclusion: Rule 8 was inapplicable to the impugned clearances and the goods were required to be valued on the accepted job work basis; the duty demand could not be sustained.

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