Separate freight recovery excluded from excise assessable value where transport is distinct from the sale price.

Freight recovered under a separate transportation arrangement was not part of the price of the goods and therefore was not includible in assessable value for central excise. The goods were delivered to the carrier under the sale arrangement, and the excess amount collected over actual transport cost could not be treated as a component of duty valuation. Accordingly, the valuation provisions and sale-of-goods principles supported exclusion of the freight amount from the assessable value, and the demand was unsustainable.

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Issues: Whether the excess amount recovered towards freight over and above the actual transportation expense was liable to be included in the assessable value for central excise purposes.

Analysis: The transportation arrangement was treated as distinct from the sale transaction, and the goods were delivered to the carrier in terms of the sale arrangement. On the facts, the amount recovered as freight was not part of the price of the goods, and the excess realization towards transportation could not be treated as a component of assessable value. The valuation provisions and the sale of goods principles regarding delivery to a carrier supported exclusion of such freight from duty computation.

Conclusion: The excess freight recovered was not includible in the assessable value, and the demand was unsustainable.

Ratio Decidendi: Freight collected under a separate transportation arrangement, even if recovered in excess of actual transport cost, is not includible in assessable value when it is not part of the price of the goods.

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