Excise valuation for depot-based sales: freight and insurance included only up to "place of removal", not customer delivery

In determining assessable value under Central Excise law, the SC held that freight and insurance are includible only up to the "place of removal." Applying Escorts JCB, where valuation excludes post-removal expenses, the Court treated the depot as the place of removal when sales occur from the depot. Accordingly, freight and insurance incurred up to the depot form part of assessable value, but freight and insurance for delivery from the depot to customers are post-removal charges and cannot be included. Appeals were allowed with this clarification.

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The Supreme Court of India clarified that freight and insurance charges up to the depot are included in the assessable value for excise purposes. However, charges for delivery to customers from the depot are not included. The decision is based on the case of Escorts JCB Ltd. v. Commissioner of Central Excise, Delhi-II [2002 (146) E.L.T. 31 (S.C.)]. The appeals were allowed with this clarification.

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