Depot-based valuation for excise: only freight to the place of delivery is deductible when the depot is the place of removal.

Assessable value for caustic soda lye cleared from a harbour depot was to be taken from the depot sale price, because the depot functioned as the place of removal and the goods were not sold at the factory gate. The factory-gate price could not govern valuation on those facts. Under the applicable valuation rule, only transportation cost from the depot to the place of delivery was deductible. Expenses incurred up to delivery at the depot, including packing and handling charges, were not deductible where the sale occurred from the depot. The factory-gate valuation principle applied only where the sale was effected at the factory gate.

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Issues: Whether the assessable value of caustic soda lye cleared from the harbour depot had to be determined on the basis of the depot sale price after allowing deduction only of freight, or on the factory gate price claimed by the assessee.

Analysis: The goods were found to be sold from the harbour depot, which functioned as the place of removal, and not from the factory gate. The depot was a regular selling depot and not an exclusive storage facility for the buyer. In such a situation, the ex-factory price could not govern valuation. Under the valuation rule applicable to price at a place other than the place of removal, the only admissible deduction was the cost of transportation from the depot to the place of delivery. Expenses incurred up to delivery at the depot, including packing, handling and similar charges, were not deductible on the facts found. The reliance on the factory-gate valuation precedent was misplaced because that principle applied where the sale was effected at the factory gate.

Conclusion: The assessable value had to be determined with reference to the depot price at the place of removal, less only the freight from the depot to the place of delivery, and the assessee's challenge failed.

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