Transportation charges excludible from assessable value when properly established as part of goods movement costs.

Transportation cost recovered for movement of goods from the place of removal to the place of delivery is excludible from assessable value when it is properly established or otherwise ascertainable under the valuation rule, including on an averaged costing basis. Forwarding charges recovered as part of the transportation arrangement were treated as such excludible charges because the assessee produced material showing their connection with movement of goods from the factory to the transporter's godown, and there was no finding that the recovery exceeded actual transportation cost or that the evidence was insufficient.

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Issues: Whether the forwarding charges recovered by the assessee represented transportation cost excludible from the assessable value under the valuation rules.

Analysis: The dispute turned on the character of the amounts collected as forwarding charges. The relevant valuation rule, as amended from 1-3-2003, excludes the cost of transportation from the place of removal to the place of delivery from the transaction value, and explains that where freight is averaged, the cost may be determined on generally accepted costing principles. The contemporaneous departmental clarification also accepted exclusion of transportation cost when separately ascertainable. On the facts, the assessee produced material showing that the charges related to movement of goods from the factory to the transporter's godown as part of the overall transportation arrangement, and there was no finding that the recovery exceeded the actual transportation cost or that the evidence was insufficient to establish the nature of the charge.

Conclusion: The forwarding charges were held to be transportation charges excludible from assessable value, and the demand could not be sustained.

Final Conclusion: The appeals succeeded, with the assessee obtaining relief against inclusion of the disputed transportation-related charges in the assessable value.

Ratio Decidendi: Transportation cost recovered for movement of goods from the place of removal to the place of delivery is excludible from assessable value when it is properly established or ascertainable, including on an averaged costing basis.

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