determination of assessable value for job work transaction

[PRANAB PANDA]

We are executing the job work for conversion of MS-Slab to MS-Hot Rolled coil on or behalf of the principal manufacturer. We have been asked by the said manufacturer to dispatch the materials from our plant to one of the plant of the principal manufacturer located in different location for use in further manufacturing activities.

Your valuable opinion is solicited to clarify legal position for arriving assessable value for discharge of Excise duty on the HR product under Central Excise (Valuation) Rules, 2000

• Whether under Rule 10 A (iii) read with Rule 6 or Rule 8 of Central Excise (Valuation) Rules, 2000?

AI Summary

Captive consumption rule determines assessable value for job work transfers, shaping valuation under Central Excise Valuation Rules.
When job-worked goods remain the principal manufacturer's property and are transferred to a unit of the principal for further manufacture, the transfer is treated as captive consumption and valuation should be determined under Rule 8 of the Central Excise (Valuation) Rules, 2000; the post 2012 expanded definition of "related person" supports this view, although conflicting tribunal authorities exist and practical consultation with the range officer is advised.