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Issues: Whether, in sales made on FOR basis, the place of removal shifts to the buyer's premises for the purpose of valuation under section 4 of the Central Excise Act, 1944 and the related eligibility to include freight and transit insurance in assessable value.
Analysis: The dispute turned on the meaning of "place of removal" in section 4(3)(c)(iii) of the Central Excise Act, 1944 and whether that expression can extend to the buyer's premises merely because the contract is on FOR terms. The reasoning contrasted the view taken in Roofit Industries with the later and more direct exposition in Ispat Industries, which held that the statutory expression refers to the seller's place or premises from where the goods are to be sold after clearance, and not the buyer's premises. The same understanding was treated as applicable to the corresponding credit rules as well. On that basis, freight and transit insurance beyond the seller's premises were not part of the assessable value on the footing adopted by the department.
Conclusion: The place of removal does not shift to the buyer's premises merely because the sale is on FOR basis. The demand based on that premise was not sustainable.
Final Conclusion: The impugned order dropping the demand was affirmed, and the revenue's challenge failed.
Ratio Decidendi: For valuation under section 4 of the Central Excise Act, 1944, the place of removal remains the seller's premises or another seller-referable premises, and it does not become the buyer's premises merely because the contract is on FOR basis.
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