Central excise valuation excludes supplier profit where job charges already capture profit and duty is paid on raw materials.

For central excise valuation, the supplier's profit on raw materials was not to be added where the assessee manufactured polyethylene coated substrates on a job-work basis for customers supplying some or all materials. Duty had already been paid on the raw material cost and the job charges, and those job charges already reflected profit. No further addition for the supplier's profit was therefore warranted in the assessable value, and the assessee's position was upheld.

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Issues: Whether the profit of the supplier of raw materials, over and above the cost of such materials and the job charges, was includible in the assessable value for central excise duty.

Analysis: The appellants manufactured polyethylene coated substrates on job work basis for customers who supplied some or all of the raw materials. Duty had already been paid on the cost of the raw materials and on the job charges earned for the work undertaken. The question was whether any further addition on account of the supplier's profit could be made while determining assessable value. Since the job charges already included profit, no further addition was warranted.

Conclusion: The supplier's profit was not includible in the assessable value. The appeal was allowed in favour of the assessee.

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