Ex-factory valuation excludes separately recovered freight charges not shown in excise invoices, supporting consequential relief.

For ex-factory clearances under section 4(1)(a) of the Central Excise Act, freight charges separately recovered through commercial invoices are not includible in assessable value merely because they were omitted from the excise invoices. The relevant pricing basis was ex-factory, and the separate recovery of freight did not by itself justify adding those charges to the assessable value. On that principle, the freight demand was unsustainable and consequential relief followed.

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Issues: Whether freight charges collected through commercial invoices, but not reflected in the excise invoices, were liable to be included in the assessable value for clearances made on an ex-factory basis.

Analysis: The clearances were made ex-factory under section 4(1)(a) of the Central Excise Act. The freight charges were recovered separately through commercial invoices and were not shown in the excise invoices. The governing principle applied was that, where the price is ex-factory, freight charges recovered in this manner are not includible in the assessable value, and the absence of their mention in the excise invoices does not by itself justify addition of such charges.

Conclusion: The freight charges were not includible in the assessable value and the assessee succeeded on the issue.

Final Conclusion: The appeal was allowed and the demand to add freight charges to the assessable value was set aside, with consequential relief.

Ratio Decidendi: For ex-factory clearances, freight charges separately recovered through commercial invoices are not includible in assessable value merely because they were not reflected in the excise invoices.

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