Ex-works valuation excludes freight and insurance from assessable value when goods are delivered at the buyer's premises.

Freight and insurance are excluded from the assessable value where goods are sold on an ex-works basis and the price is fixed at ex-factory level. Under Section 4(1)(a) of the Central Excise Act, 1944, valuation depends on the place of removal, and the buyer's premises cannot be treated as that place merely because delivery occurs there. Freight from the factory to the buyer's premises therefore remains outside assessable value, even when separately shown in the purchase order. The resulting demand based on inclusion of freight and insurance is unsustainable.

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Issues: Whether freight and insurance charges are includible in the assessable value for excise duty when the goods are supplied on an Ex-works basis and delivered at the buyer's premises.

Analysis: The purchase orders separately indicated freight and insurance, while the price of the transformers was fixed at Ex-works/Ex-factory price. The applicable valuation rule under Section 4(1)(a) of the Central Excise Act, 1944 requires the assessable value to be determined with reference to the place of removal. The settled position applied by the Tribunal was that the buyer's premises cannot be treated as the place of removal, and freight from the factory to the buyer's premises is not part of the assessable value even where delivery is made at the buyer's premises.

Conclusion: Freight and insurance charges are not includible in the assessable value, and the demand based on their inclusion is unsustainable.

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