Separate sale and transport contracts mean freight after removal is excluded from excisable assessable value.

Where sale and transportation are covered by separate contracts and goods are delivered to the carrier for transmission to the buyer, freight and related transit charges from the place of removal to the place of delivery are not includible in the assessable value under Section 4 of the Central Excise Act, 1944. The Tribunal applied the settled principle that delivery to a carrier in pursuance of a contract of sale is prima facie delivery to the buyer, and treated post-removal transportation charges under the separate arrangement as outside excise valuation. The Revenue's appeals were dismissed and the assessee's valuation position was accepted.

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Issues: Whether freight and transportation charges incurred for movement of goods from the place of removal to the place of delivery were includible in the assessable value under Section 4 of the Central Excise Act, 1944 when the sale and transportation were covered by separate contracts.

Analysis: The dispute turned on the character of the transaction and the point at which delivery of the finished goods was effected. The contracts for sale and for transportation were separate, and the goods were delivered to the carrier in terms of the contractual arrangement. Relying on the principle that delivery to a carrier in pursuance of a contract of sale is prima facie delivery to the buyer, and on the settled position that charges for transportation from the place of removal to the place of delivery are not part of assessable value where such charges are separately contracted, the Tribunal applied the ratio governing similar ex-works and FOR-related transactions.

Conclusion: Freight and transportation charges were not includible in the assessable value; the Revenue's appeals were liable to be dismissed and the assessee's position was accepted.

Final Conclusion: The valuation dispute was resolved in favour of the assessee on the basis that post-removal transportation charges under a separate transportation arrangement do not form part of the excisable assessable value.

Ratio Decidendi: Where sale and transportation are governed by separate contracts and the goods are delivered to the carrier for transmission to the buyer, freight and related transit charges from the place of removal to the place of delivery are not includible in the assessable value under Section 4 of the Central Excise Act, 1944.

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