Freight charges excluded from assessable value where goods were sold ex-factory and transport was a separate activity.

Ex-factory supplies with transportation undertaken separately meant the place of removal remained the factory gate, so freight-related profit collected on transport charges was not includible in assessable value for excise duty. On those facts, the refund claim for duty paid on amounts outside assessable value was not barred by unjust enrichment, and the Board circular did not alter the position. The prior decision in the assessee's own case for another unit supported the same treatment. The refund was therefore admissible and rejection of the claim was unsustainable.

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Issues: Whether the excess freight collected by the assessee from buyers was includible in the assessable value for excise duty, and whether the refund claim was barred by unjust enrichment.

Analysis: The goods were supplied ex-factory under purchase orders, and transportation was undertaken as a separate activity. The place of removal was therefore the factory gate and not the buyer's delivery point. Freight-related profit earned on transportation charges could not be treated as part of the assessable value. The earlier decision in the assessee's own case for another unit supported the same view, and the Board circular relied upon did not alter the position on the facts found. Since the duty had been paid on an amount not forming part of the assessable value, the refund was not hit by unjust enrichment on the facts of the case.

Conclusion: The refund claim was admissible and the impugned rejection was unsustainable.

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