Assessable value excludes excess freight retained by a collection agent absent proof it was actually received by the manufacturer.

Excess freight retained by a collection agent was not includible in the assessable value of goods cleared by the manufacturer because the agent only procured orders, arranged transport and collected sale proceeds on behalf of customers, while the goods moved directly from the factory gate on invoices showing assessable value and duty payment. In the absence of tangible evidence that the manufacturer collected or received any part of the excess freight, or that sale price was disguised as freight, the two entities remained separate legal persons and operated independently. The duty demand, interest and penalties were therefore unsustainable.

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Issues: Whether excess freight charges retained by the collection agent could be included in the assessable value of the goods cleared by the manufacturer, and whether the duty demand, interest and penalties could be sustained.

Analysis: The arrangement showed that the collection agent was only procuring orders, arranging transportation and collecting sale proceeds on behalf of the customers, while the goods were cleared directly from the manufacturer's factory gate on invoices reflecting the assessable value and duty payment. The Revenue failed to produce tangible evidence that any part of the excess freight was being collected by the manufacturer under the guise of freight or that the excess amount was being passed on to the manufacturer. The two entities were separate legal persons and operated independently. Even where excess freight is collected by the manufacturer itself, it does not enter the assessable value unless the evidence shows that the sale price was disguised as freight.

Conclusion: The excess freight retained by the collection agent was not includible in the assessable value, and the duty demand, interest and penalties were unsustainable.

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