Post-removal freight and transit insurance are excluded from excise assessable value when sale and transport are separately arranged.

Where goods were cleared on ex-factory terms and transportation and transit insurance were separately recovered, post-removal freight and insurance were held not includible in the assessable value for excise duty. The Tribunal applied the settled valuation principle that the place of removal remains the factory gate or other contractually relevant point, and that expenses incurred after removal do not form part of transaction value when the sale and transit arrangements are distinct. Delivery to the carrier could amount to delivery to the buyer, so the separate recovery of transit charges did not alter their excludibility.

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Issues: Whether transportation and insurance charges recovered separately in respect of goods cleared on ex-factory terms are includible in the assessable value for excise duty.

Analysis: The dispute concerned post-clearance charges shown separately from the price of the goods. The Tribunal followed the settled position that, where the sale of goods and the transportation arrangement are distinct and the goods are delivered to the carrier after removal from the factory, the place of removal remains the factory gate or other contractually relevant point of removal. In such a case, freight and transit insurance incurred after removal are not part of the transaction value for valuation under the excise law. The decision relied on the principle that delivery to a carrier can amount to delivery to the buyer under the Sale of Goods Act, and that post-removal expenses are not includible merely because they are recovered from the buyer or because the seller arranges transit insurance.

Conclusion: The transportation and insurance charges were not includible in the assessable value, and the appeal succeeded.

Final Conclusion: The demand was set aside by applying the settled valuation rule that post-clearance freight and insurance, when separately recoverable and linked to transit after removal, do not form part of excisable value.

Ratio Decidendi: For central excise valuation, expenses incurred after removal from the place of removal are excludible from assessable value where the sale price is independent and the freight or insurance pertains to post-clearance transit arrangements.

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