Central excise valuation excludes factory-to-depot freight where depots are not the place of removal under the rules.

For goods cleared on stock transfer to depots and sold later, valuation under Section 4(1) of the Central Excise Act turns on transaction value at the time and place of removal. Because the then-applicable definition of "place of removal" did not extend to depots after factory clearance, Rule 7 of the Central Excise Valuation Rules, 2000 could not add freight from the factory to the depots to assessable value. The Act prevails over delegated rules where there is inconsistency, so such transportation cost was excluded from valuation.

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Issues: Whether, for goods cleared on stock transfer to depots and sold thereafter, the assessable value included the transportation cost from the factory to the depots under Rule 7 of the Central Excise Valuation Rules, 2000.

Analysis: Section 4(1) of the Central Excise Act governed valuation by reference to the transaction value at the time and place of removal. During the relevant period, the statutory definition of place of removal did not extend to depots or similar sale points after clearance from the factory. Rule 7 could not enlarge the charging provision so as to include freight from the factory to the depot, because in the event of inconsistency the Act prevails over delegated rules.

Conclusion: The transportation cost from the factory gate to the depots was not includible in the assessable value, and the Revenue's challenge failed.

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