Transport charges excludible from assessable value when goods are sold from the place of removal, including averaged freight.

Where goods are sold for delivery from the place of removal, transportation cost from that place to the place of delivery is excluded from assessable value under Section 4 of the Central Excise Act and Rule 5 of the 2002 Valuation Rules. The factory gate was treated as the relevant place of removal, so freight up to the delivery point did not form part of the transaction value. The exclusion applied to both actual freight and averaged freight, and transport charges were held not includible in assessable value.

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Issues: Whether transport charges were includible in the assessable value of goods cleared on freight-paid basis.

Analysis: Under Section 4 of the Central Excise Act, the value in a case of sale for delivery at the time and place of removal is the transaction value. Applying the Supreme Court's view on the place of removal, the factory gate was the relevant place of removal, so transportation charges up to the place of delivery were not part of the assessable value. Rule 5 of the Central Excise (Determination of Price of Excisable Goods) Rules, 2002 also excludes cost of transportation from the place of removal to the place of delivery, and its Explanation covers both actual freight and averaged freight. The rule does not confine deduction only to freight charged on an actual basis.

Conclusion: Transport charges were not includible in the assessable value, and the Revenue's appeals failed.

Ratio Decidendi: Where goods are sold for delivery from the place of removal, transportation cost from that place to the place of delivery is excludible from assessable value, including where freight is averaged.

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