Equalised freight deduction from depot to buyer upheld where unrebutted evidence showed transport beyond the place of removal.

Freight beyond the place of removal was treated as excludible from assessable value under Section 4 of the Central Excise Act where the depot was the place of removal and the assessee's chartered accountant certificate, read with the equalised freight circular, supported deduction from depot to dealer premises; the department produced no contrary evidence, so the deduction was accepted. The objection that the certificate did not classify freight as primary or secondary was treated as a matter of nomenclature only. On similar factual grounds, the ratio of VIP Industries was held applicable because the assessee's claim of a constant country-wide price was unrebutted. The demand was therefore not sustainable on the reasoning adopted below.

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Issues: (i) Whether deduction of equalised transportation cost from the depot to the dealer's premises was admissible in computing assessable value under Section 4 of the Central Excise Act, 1944. (ii) Whether the assessee could rely on the ratio of VIP Industries on the basis that the products were sold at a constant uniform price throughout the country.

Issue (i): Whether deduction of equalised transportation cost from the depot to the dealer's premises was admissible in computing assessable value under Section 4 of the Central Excise Act, 1944.

Analysis: Freight is includible in assessable value only up to the place of removal, and once depot is treated as the place of removal, transportation beyond that point is not part of the assessable value. The certificate of the chartered accountant stated that the deduction claimed related only to transportation from the depot to the dealer's destination. The objection that the certificate did not label the freight as primary or secondary was treated as a matter of nomenclature, and no contrary evidence was produced to discredit the certificate. The circular on equalised freight was read as permitting such deduction except in the limited situation mentioned therein, and the assessee's method of computation was not disproved.

Conclusion: The deduction of equalised transportation cost was held admissible and the issue was decided in favour of the assessee.

Issue (ii): Whether the assessee could rely on the ratio of VIP Industries on the basis that the products were sold at a constant uniform price throughout the country.

Analysis: The objection that VIP Industries was inapplicable because no uniform price was shown was rejected. The assessee asserted that it maintained a constant country-wide price, and there was no material on record contradicting that assertion. In the absence of adverse evidence, the factual basis for applying the precedent was accepted.

Conclusion: The ratio of VIP Industries was held applicable in favour of the assessee.

Final Conclusion: The demand could not be sustained on the reasoning adopted below, and the assessee's claim for deduction of freight from the depot to the buyer's premises was accepted.

Ratio Decidendi: Where freight beyond the place of removal is supported by unrebutted evidence, equalised freight may be deducted from assessable value, and the department bears the burden of producing material to disprove the assessee's computation.

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