Assessable value and factory-gate appropriation support exclusion of post-clearance freight and insurance at the interim stage.

Freight and insurance charges were considered prima facie excludible from assessable value where goods were appropriated at the factory gate and the customer's premises were not the place of removal. The analysis turned on the contract terms governing delivery, transportation and transit insurance under the amended section 4 valuation regime. Because transportation and insurance were separately arranged after appropriation, the post-clearance charges were treated as outside assessable value at the interim stage, making the demand appear unsustainable and supporting waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether, for purposes of interim relief, freight and insurance charges were prima facie excludible from assessable value on the footing that the sale stood appropriated at the factory gate and the customer's premises were not the place of removal.

Analysis: The order noted the competing views on valuation under the amended section 4 regime and the relevance of the contract terms governing delivery, transportation, and insurance. It accepted, at least prima facie, that where goods are earmarked and appropriated at the factory gate and transportation and transit insurance are separately arranged, the post-clearance freight and insurance charges may not form part of assessable value. On that basis, the demand was treated as appearing unsustainable at the interim stage.

Conclusion: The appellant was granted waiver of pre-deposit and recovery of the disputed duty and penalty was stayed during pendency of the appeal.

Final Conclusion: Interim relief was granted because the appellant established a strong prima facie case against inclusion of the disputed freight and insurance charges in the assessable value.

Ratio Decidendi: Where goods are appropriated to the contract at the factory gate and transportation and insurance are separately undertaken after such appropriation, the disputed post-clearance charges may be kept out of assessable value at the interim stage.

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