Place of removal in excise valuation excludes post-clearance freight when ownership passes at the factory gate.

Freight recovered separately from buyers is not includible in the assessable value of excisable goods where the sale is concluded at the factory gate and ownership passes there. The buyer's premises cannot be treated as the place of removal merely because delivery is made there or freight is shown in the invoice. The operative test is the contract and surrounding facts showing when and where property in the goods passes; only where sale and transfer occur on delivery at the buyer's premises would post-clearance freight form part of valuation. On the stated facts, freight was excluded from assessable value and the duty, interest and penalty demand was unsustainable.

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Issues: Whether freight recovered separately from buyers could be included in the assessable value of excisable goods by treating the buyers' premises as the place of removal.

Analysis: The dispute turned on the proper meaning of "place of removal" under the valuation scheme for central excise. The decision applied the principle that the buyer's premises cannot, in law, be treated as the place of removal merely because freight is recovered in the invoice or delivery is made at the buyer's end. The governing test is where the sale is effected and when ownership in the goods passes, to be determined from the contract and surrounding circumstances. Where the sale is at the factory gate and property passes there, freight for post-clearance transport does not form part of the assessable value. The decision also distinguished situations where the goods are contracted to be delivered at the buyer's premises and ownership passes only on such delivery.

Conclusion: Freight collected from buyers was not includible in the assessable value, the buyer's premises could not be treated as the place of removal on these facts, and the demand of duty, interest and penalty was unsustainable.

Ratio Decidendi: Freight incurred after ownership in the goods passes at the factory gate is not part of the excisable value, and the buyer's premises cannot be treated as the place of removal unless the contract and facts show that sale and transfer of property occur only upon delivery there.

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