Prepaid transportation charges on F.O.R. destination sales excluded from assessable value when factory-gate delivery is not disproved.

Prepaid transportation charges on F.O.R. destination sales are not includible in assessable value for central excise where the evidence does not show that delivery and transfer of responsibility occur beyond the factory gate. The invoices and other material indicated that freight was sometimes shown separately and that the seller's responsibility ended after transportation of the goods, while no rate contract or similar evidence established a basis for treating the freight as part of the goods' value. On that reasoning, the assessee's appeal was sustained and the Revenue's challenge failed.

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Issues: Whether prepaid transportation charges on F.O.R. destination sales on contract basis were liable to be added to the value of the goods for payment of central excise duty.

Analysis: The available material, including the invoices, showed that in some cases freight was shown separately and in others it was not included; the documentary evidence indicated that the respondent's responsibility ceased after transportation of the goods. The record did not establish any rate contract or other material showing that the goods were not delivered at the factory gate in the manner required to justify inclusion of transportation charges in the assessable value.

Conclusion: The transportation charges were not required to be added to the assessable value, and the Revenue's appeal failed.

Final Conclusion: The order allowing the assessee's appeal was sustained and the Revenue's challenge was rejected.

Ratio Decidendi: Where the evidence does not show that delivery and transfer of responsibility occur beyond the factory gate so as to make freight part of the assessable value, prepaid transportation charges on F.O.R. destination sales are not includible in assessable value.

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