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Issues: (i) Whether the value of raw materials supplied by customers was to be included in the value of goods manufactured on job work basis for computing eligibility under the exemption notification; (ii) Whether the demand covered by the show cause notice dated 17 June 1982 was barred by limitation.
Issue (i): Whether the value of raw materials supplied by customers was to be included in the value of goods manufactured on job work basis for computing eligibility under the exemption notification.
Analysis: The Tribunal held that the earlier view treating job charges alone as relevant could no longer prevail in light of the Supreme Court's rulings on excise valuation. The assessable value for exemption purposes had to take into account the intrinsic value of the processed goods, including the value of raw materials supplied by customers. The Tribunal also relied on its earlier decision following the Supreme Court's approach that the entire value of the resultant product on job work is relevant for calculating annual production.
Conclusion: The value of raw materials supplied by customers was includible, and this issue was decided in favour of Revenue.
Issue (ii): Whether the demand covered by the show cause notice dated 17 June 1982 was barred by limitation.
Analysis: The Tribunal found that the limitation objection had been raised earlier and was supported by the record. The notice relating to the period 29 September 1980 to 31 March 1981 contained no allegation of suppression of facts, and the extended period could not be invoked. As the notice was issued beyond six months for that period, the demand was time-barred. The other two notices were held to be within time.
Conclusion: The demand under the show cause notice dated 17 June 1982 was barred by limitation, and this issue was decided in favour of the assessee.
Final Conclusion: The appeal succeeded only on the valuation issue and failed on the limitation objection, resulting in partial relief to Revenue with one demand being set aside as time-barred.
Ratio Decidendi: For excise exemption and valuation purposes, the assessable value of job-work goods includes the value of raw materials supplied by customers, and a demand is time-barred where extended limitation is unsupported by any allegation of suppression of facts.
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