Job-work valuation excludes supplier resale profit from assessable value; only manufacturing charges form part of valuation.

In valuation of goods manufactured on a job-work basis, only the prescribed manufacturing charges form part of the assessable value, and the raw-material supplier's post-manufacture profit on resale of the finished goods is not includible. Applying the valuation principles laid down in Ujagar Prints, the addition made by the lower authorities for the supplier's resale profit was held unsustainable. The assessable value therefore had to be confined to the job worker's manufacturing element, without loading it with downstream trading profit.

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Issues: Whether, in valuing goods manufactured on job work basis, the profit earned by the supplier of raw materials on sale of the finished goods is includible in the assessable value.

Analysis: The appellant manufactured chemicals as a job worker from raw materials supplied by another person and returned the finished goods. The assessable value had been enhanced by adding the profit of the raw material supplier on resale of the finished products. The valuation principles laid down by the Supreme Court in Ujagar Prints were treated as governing the field, under which only the prescribed manufacturing charges form part of assessable value and the seller's post-manufacture profit is not includible.

Conclusion: The seller's profit was not includible in the assessable value, and the inclusion made by the lower authorities was unsustainable.

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