Assessable value excludes outward freight where ex-works sale leaves the factory gate as the place of removal.

Outward freight recovered from buyers was held not includible in the assessable value where the sale operated on an ex-works or factory-gate basis and the seller only arranged transport. The place of removal remained the factory premises because property, payment and delivery were effected there, so freight and transit insurance incurred after clearance did not form part of value. On that basis, the demand on freight could not survive and the appeal was allowed in favour of the assessee.

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Issues: Whether outward freight recovered from buyers was includible in the assessable value of the goods, and whether the place of removal stood shifted from the factory gate to the buyers' premises.

Analysis: The goods were sold on terms indicating delivery at the buyers' premises, but the decisive factor was the sale arrangement and the point at which property, payment and delivery were effected. Where the sale is on an ex-works or factory-gate basis and the seller merely arranges transport, the place of removal remains the factory premises. Freight and transit insurance incurred after clearance from the factory are not part of the assessable value when the risk and delivery beyond the factory gate do not alter the place of removal.

Conclusion: Outward freight was not includible in the assessable value, and the demand on that component could not survive. The appeal was allowed in favour of the assessee.

Ratio Decidendi: Freight incurred after removal from the factory is not includible in assessable value when the sale is ex-works and the factory gate remains the place of removal.

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