Factory gate sale and freight exclusion apply when goods are unconditionally appropriated to contract and handed to a carrier.

Goods inspected, stamped, and unconditionally appropriated to the contract at the seller's factory were treated as sold at the factory gate, because property passed when they were handed to the carrier without reservation of disposal under Section 23 of the Sale of Goods Act. On that basis, the buyer's premises were not the place of sale. Freight shown separately in the invoices was held excludible from the assessable value, particularly as the goods were not insured by the seller. The appeals succeeded and the contrary order was set aside on the place-of-sale and freight-deduction issues.

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Issues: Whether the sales of goods to Government departments took place at the appellant's factory gate or at the buyer's end, and whether freight incurred for transporting the goods was deductible from the assessable value.

Analysis: The contract terms, inspection at the factory premises, stamping of the goods after inspection, and handing over of the goods to the transporter indicated that the goods were appropriated to the contract at the factory itself. Section 23 of the Sale of Goods Act was applied to hold that, when goods in a deliverable state are unconditionally appropriated to the contract and delivered to a carrier without reservation of the right of disposal, property passes to the buyer. On that basis, the sale was treated as having taken place at the factory gate and not at the buyer's premises. Since the invoices separately showed freight and the goods were not insured by the appellants, freight was held to be excludible.

Conclusion: The sales were held to have taken place at the factory gate, and the appellant was entitled to deduct freight while computing the assessable value.

Final Conclusion: The appeals succeeded and the impugned order was set aside on the question of place of sale and freight deduction.

Ratio Decidendi: Where goods are inspected, unconditionally appropriated to the contract at the seller's factory, and handed to a carrier without reservation of disposal, the sale is completed at the factory gate and freight may be excluded from assessable value.

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