Transit insurance does not by itself shift the place of removal for excise valuation; factory delivery governed.

For valuation under Section 4 of the Central Excise Act, 1944, transit insurance by itself did not establish that the buyer's premises was the place of removal or that title had passed there. The contractual terms showed delivery at the manufacturer's factory, while insurance could only be claimed separately on production of documents. On those facts, the factory remained the place of removal, so freight and insurance up to the buyer's premises were not includible in the assessable value. The valuation addition was therefore unsustainable.

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Issues: Whether, for valuation of the motor vehicles sold under the contract, the buyer's premises could be treated as the place of removal so that freight and insurance up to that destination formed part of the assessable value under Section 4 of the Central Excise Act, 1944.

Analysis: The contractual terms showed that delivery was to be made at the manufacturer's factory, while the clause relating to insurance only permitted insurance to be claimed as a separate item on production of documents. The mere fact that the goods were insured during transit did not, by itself, establish that title had not passed to the buyer or that the buyer's premises became the place of removal. On the facts, the manufacturer's factory remained the place of removal.

Conclusion: The buyer's premises was not the place of removal, and freight and insurance up to that destination were not includible in the assessable value.

Final Conclusion: The valuation addition was unsustainable and the order of the Commissioner was set aside, resulting in success for the assessee.

Ratio Decidendi: Under Section 4 of the Central Excise Act, 1944, transit insurance alone does not determine the place of removal or displace delivery at the manufacturer's factory as the point from which assessable value is to be computed.

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