Central excise valuation excludes buyer's margin of profit under Rule 6(b)(ii); only manufacturing cost and margin count.

Under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, assessable value is to be computed on the basis of the cost of raw materials, labour charges and the manufacturer's margin of profit. The buyer's margin of profit is not a permissible component of assessable value and cannot be added for valuation on any basis. On that footing, inclusion of the buyer's margin was held impermissible, and the valuation order was unsustainable.

---

---

Issues: Whether, while valuing goods under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, the assessable value could include the buyer's margin of profit in addition to the cost of raw materials, labour charges and the manufacturer's margin of profit.

Analysis: Under Rule 6(b)(ii), the assessable value is to be built on the cost of raw materials, labour charges and the manufacturer's margin of profit. The buyer's margin of profit does not form part of the assessable value and cannot be loaded into valuation on any count.

Conclusion: The inclusion of the buyer's margin of profit was impermissible and the valuation order was unsustainable.

---