ORDER
Gowri Shankar, Member (T)
1. The question for consideration in this appeal is the includibility in the assessable value of the goods manufactured by the appellant as a job worker, the element of excise duty paid on the raw material supplied to him, which he took as Modvat credit. In the order impugned in the appeal, the Collector (Appeals) has confirmed the finding of the Assistant Collector that, notwithstanding that credit was taken by the assessee, excise paid on goods is includible in their value determined under Rule 6(b)(ii) of the Valuation Rules.
2. Mr. K. Gopal, Managing Director of the appellant contends that the issue is settled by the decision of this Tribunal in Dai Ichi Karkaria v. CCE [1996 (81) E.L.T. 676]
3. The departmental representative however makes a submission that the ratio of that decision would apply to cases where recourse has to be had to Section 4(1)(b) or Rule 6(b) of the Valuation Rules because the goods are captively consumed. He says that it will not apply to the situation, where credit is taken by a job worker, as in the present case.
4. We are unable to perceive any valid distinction between the application of the principles in Dai Ichi Karkaria in cases where the inputs are captively consumed and in cases where they are utilised by the job worker. The only difference is that in the first case, it is the manufacturer of the inputs who captively consumed the goods and in the other it is not him but another one who utilized the goods for the manufacture of finished goods. In both cases, value has to be arrived at under Rule 6(b)(ii). In the case of a job worker, it is he who takes the Modvat credit, which is set off by him is against the duty paid. The principles in Dai Ichi Karkaria will equally apply being in the case of job worker. As long as credit is available to set off the payment of duty on the goods, it cannot be made use to it so that expenditure cost of the material will reduce. In fact, para 19 of the Dai Ichi Karkaria order makes it clear that credit should not form part of value inputs for purpose of valuing the product under Section 4(1)(b) and Rule 6(b) of its value.
5. The appellant was therefore entitled not to include the excise duty element in the value of the goods.
6. Appeal allowed. Impugned order set aside.