Equalized freight deduction allowed in assessable value computation where actual transport cost to delivery point was evidenced.

Equalized or average freight incurred for transport from the factory gate to the place of delivery was deductible in computing assessable value where the assessee supported the claim with Chartered Accountant certificates and evidence of actual transportation cost. The accepted valuation principle allowed deduction of freight to the delivery point, and the cited line of decisions was treated as supporting the same approach even after the amended valuation rules. On those facts, the claimed abatement was admissible and there was no basis to sustain the duty demand, interest, or penalties.

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Issues: Whether equalized or average freight incurred for transportation from the factory gate to the place of delivery was deductible from the contracted price for determination of assessable value, and whether the demand of duty, interest and penalties could be sustained.

Analysis: The appellants produced Chartered Accountant certificates showing the transportation cost actually incurred and contended that the freight deducted from the contracted price was not more than the actual expenditure. The governing valuation principle permits deduction of transportation cost from the factory gate to the point of delivery, and the reasoning accepted in the cited line of decisions supported allowance of equalized or average freight even after the amended valuation rules came into force. On the facts, the claimed abatement was held to be admissible and there was no justification for invoking duty demand or penalty.

Conclusion: The deduction of equalized freight was held admissible in determining assessable value, and the duty demand, interest and penalties were set aside in favour of the assessee.

Ratio Decidendi: Where transportation cost actually incurred is supported and the deduction claimed represents freight from the factory gate to the place of delivery, equalized freight may be deducted in computing assessable value under the central excise valuation scheme.

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