Freight charges on destination-based supplies stay outside assessable value when the transportation nature is established.

Freight incurred for delivery of goods to the buyer's destination is not includible in assessable value where it is actually transportation cost from the factory to the consignee and its character is established on record. Separate reflection of freight in invoices supports the deduction, but imperfect invoice description or ledger classification as handling charges does not change the nature of the expense. Mere non-mention or incomplete mention in invoices, by itself, is insufficient to deny exclusion when the factual incurrence of freight is undisputed. The valuation rule invoked by the Revenue was therefore inapplicable on these facts, and deduction of freight charges remained available.

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Issues: Whether freight charges incurred for delivery of goods to the buyer's destination were includible in the assessable value, and whether the deduction could be denied because the charges were described as handling charges in the ledger or were not separately reflected in every invoice.

Analysis: The goods were supplied on a destination basis and the freight was actually incurred for transportation from the factory to the consignee. The record showed that freight was separately indicated in the invoices, and the manner of bookkeeping in the ledger did not alter the character of the expense. Mere non-mention or imperfect mention of freight in invoices, by itself, was held insufficient to justify inclusion in assessable value when the nature of the charge and its incurrence were not in dispute. The valuation rule relied upon by the Revenue was found inapplicable to deny the deduction in the facts of the case.

Conclusion: Freight charges were not includible in the assessable value, and the assessee was entitled to the deduction.

Final Conclusion: The Revenue's challenge to the exclusion of freight from assessable value failed, and the order allowing deduction of freight charges was sustained.

Ratio Decidendi: Where freight is actually incurred for delivery to the buyer's destination and its character as transportation cost is established, it cannot be included in assessable value merely because of ledger classification or imperfect invoice description.

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