FOR destination sales and freight inclusion fail when Revenue cannot prove separate recovery from buyers.

Where goods were sold on FOR destination basis and duty was paid on transaction value, outward freight was not includible in assessable value in the absence of a specific allegation or evidence that transport charges were separately recovered from buyers. The notice did not establish any additional collection beyond the invoice value, and Revenue failed to discharge the burden of proving the factual basis for freight inclusion. The finding that freight had been added over and above the assessable value was therefore unsupported by evidence. The duty demand, penalty and interest were accordingly unsustainable and the impugned orders were quashed.

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Issues: Whether outward freight charges were includible in the assessable value for excise duty where the sales were on FOR destination basis and whether the demand could be sustained without a specific allegation or evidence that such freight was separately recovered from buyers.

Analysis: The appellant sold goods on FOR destination basis and paid duty on the transaction value. The demand proceeded on the assumption that freight had to be added again, but the notice did not specifically allege that the appellant had separately recovered transport charges over and above the invoice value. No oral or documentary evidence established any such additional collection. In these circumstances, the burden lay on Revenue to prove the factual basis for inclusion of freight, and that burden was not discharged. The finding that freight had been collected over and above the assessable value was therefore unsupported by evidence and was perverse.

Conclusion: Outward freight was not liable to be added to the transaction value on the facts proved, and the duty demand, penalty and interest could not be sustained. The appeal was allowed and the impugned orders were quashed.

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