Factory gate price governs valuation for job worker clearances made in genuine commercial transactions.

A job worker making clearances at the factory gate in genuine commercial transactions with independent buyers may have assessable value determined on the declared factory gate price. The cost-based valuation method applies only where no genuine factory gate sale or commercial price exists. The text relies on Ujagar Prints, the Board circular, and Sangam Processors to support that principle, and states that the declared price was the proper assessable value. The assessee's valuation was therefore upheld and the Revenue's challenge failed.

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Issues: Whether, in the case of a job worker effecting clearances at the factory gate with an independent commercial price, the assessable value was to be determined on the declared factory gate price or by applying the cost-based valuation method.

Analysis: The declared price lists showed that the job worker had independent buyers and that clearances were made on commercial terms at the factory gate. The valuation adopted by the assessee was found to be consistent with the principle laid down in Ujagar Prints for cases where there is a genuine factory gate sale. The cost-based approach was held applicable only where no such factory gate sale or commercial price exists. The Board's circular and the Tribunal's earlier decision in Sangam Processors were relied upon as supporting the same position.

Conclusion: The declared factory gate price was the proper assessable value and the Revenue's challenge to the order of the Commissioner (Appeals) failed.

Final Conclusion: The appeal was rejected and the assessee's valuation of the goods was upheld.

Ratio Decidendi: Where a job worker makes clearances at the factory gate in the course of a genuine commercial transaction, the assessable value is to be taken as the declared factory gate price and not a notional cost-based value.

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