Job-work valuation of steel ingots required cost-based assessment, including burning loss, where comparable clearances were not proved.

Steel ingots manufactured on a job-work basis were held to be assessable on a cost-based valuation method rather than on the appellants' own sale price for ingots made from purchased raw materials. The reported reasoning was that the two categories of clearances were not shown to be comparable, no evidence displaced the finding of possible quality differences, and the valuation principle therefore required inclusion of the full raw-material cost, conversion charges, manufacturing profit and burning loss. The appropriate assessable value was accordingly fixed on cost of manufacture, with burning loss treated as part of raw-material cost, and the appellants' challenge failed.

---

---

Issues: Whether the assessable value of steel ingots manufactured on job-work basis had to be determined on the appellants' own sale price for ingots made from purchased raw materials, or on a cost-based method including the cost of raw materials, conversion charges, manufacturing profit, and burning loss.

Analysis: The valuation rules invoked by the appellants were found inapplicable to the facts, as the job-work clearances were not shown to be comparable with the appellants' own clearances. The record showed that the cost-based valuation of the job-work ingots was higher than the price of the appellants' own ingots, and no evidence was produced to dislodge the finding that the two sets of ingots could differ in quality and could not be treated as comparable. The appropriate basis, therefore, was the cost of manufacture as laid down in the governing valuation principle, which required the entire cost of raw materials initially used in the manufacturing process to be taken into account, including the portion lost by burning, together with manufacturing profit.

Conclusion: The assessable value had to be determined on the cost-based method, with burning loss included in the raw-material cost, and the appellants' appeal failed.

---