Job-work excise valuation excludes trader's post-manufacturing profit from assessable value.

In valuing processed fabric manufactured on a job-work basis for central excise, the assessable value includes the price of the processed goods at the processor's factory together with the processor's manufacturing expenses, costs, charges and profit. It does not include any profit or expense arising after manufacture. Applying this settled valuation principle and Rule 174 of the Central Excise Rules, 1944 consistently with Supreme Court guidance, the trader's post-manufacturing profit was excluded from assessable value, and Revenue's challenge failed.

---

---

Issues: Whether, in valuing processed fabric manufactured on job work basis, the trader's profit was includible in the assessable value for levy of central excise duty.

Analysis: The settled position under the Supreme Court's clarificatory ruling on job work valuation was that the assessable value covers the price of the processed goods leaving the processor's factory, together with the processor's expenses, costs, charges and profit. It does not extend to profits or expenses arising after manufacture. Rule 174 of the Central Excise Rules, 1944 was read consistently with this principle, and the later supporting decisions relied on the same exclusion of post-manufacturing trader's profit from assessable value.

Conclusion: Trader's profit was not includible in the assessable value. The appeals by Revenue failed.

Ratio Decidendi: In valuation of processed goods manufactured on job work basis, only the processor's manufacturing cost, expenses and profit form part of assessable value, and any trader's post-manufacturing profit is excluded.

---