FOR sales freight included in assessable value, making refund admissible under the exemption notification

For FOR sales, outward freight is includible in assessable value where freight is not separately charged and the sale is made on FOR terms. On that basis, duty paid on the freight-inclusive value was treated as refundable under Notification No. 56/2002-CE. The clearances here were on FOR basis and no separate freight was recovered from customers, so the refund claim was held admissible and the rejection was set aside with consequential relief.

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Issues: Whether, in the case of FOR sales, outward freight forms part of the assessable value and whether duty paid on such freight-inclusive value is refundable under Notification No. 56/2002-CE.

Analysis: The dispute turned on the treatment of freight in the assessable value for goods cleared on FOR basis. The matter was already covered by earlier decisions holding that, where freight is not separately charged and the sales are on FOR terms, outward freight is includible in the assessable value and the duty paid on such value is eligible for refund under the exemption notification. On the facts, the clearances were on FOR basis and no separate freight was charged from customers.

Conclusion: The refund claim was admissible and the impugned rejection was set aside, with consequential relief to the assessee.

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