Freight deduction in assessable value remains allowable under invoice price valuation, with transit insurance treated consistently.

Freight incurred for movement of goods from the factory gate to the nearest delivery point is deductible in determining assessable value under the invoice price procedure. Notification No. 120/75-C.E. was treated as a statutory mode of valuation, but it could not displace the principle under section 4(a) that freight, whether actual or equalised, is an admissible deduction in arriving at assessable value. The same treatment was extended to transit insurance charges where valuation was based on invoice price. On that basis, deduction of freight to the nearest delivery point was held allowable and the assessee's claim succeeded on that issue.

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Issues: Whether freight incurred for movement of goods from the factory gate to the nearest delivery point is deductible in determining the assessable value under the invoice price procedure under Notification No. 120/75-C.E. and section 4(a) of the Central Excises and Salt Act, 1944.

Analysis: Notification No. 120/75-C.E. was treated as a statutory mode of valuation under rule 8(1) of the Central Excise Rules, 1944, but it could not override the principles governing assessable value under section 4(a) of the Central Excises and Salt Act, 1944. The governing principle applied was that freight, whether actual or equalised, forms an admissible deduction in arriving at the assessable value. On that basis, the same treatment had to be accorded to freight and transit insurance charges even where valuation was made under the invoice price procedure.

Conclusion: The deduction of freight from the factory gate to the nearest delivery point was allowable and the claim of the assessee succeeded on that issue.

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