Place of removal depends on contractual transfer of possession; freight and transit insurance beyond that point are excluded from value.

Where goods were supplied under contracts providing FOR station of despatch and free delivery within Delhi/New Delhi, the place of removal was treated as Delhi/New Delhi because property and possession passed to the buyer on appropriation, inspection, approval, marking and delivery to the carrier. The seller's retention of transit insurance did not keep ownership with the seller, as the contract displaced the ordinary rule that risk follows property. On that basis, freight and insurance charges for transport beyond Delhi/New Delhi were not includible in the assessable value.

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Issues: Whether the place of removal was the factory gate or Delhi/New Delhi, and whether freight and insurance charges for transport from Delhi/New Delhi to the buyer's premises were includible in the assessable value.

Analysis: The goods were supplied under rate contracts showing delivery FOR station of despatch and free delivery within Delhi/New Delhi, with freight shown separately. The buyer was the consignee, and the invoices reflected the assessable value at Delhi/New Delhi. The goods were appropriated to the contract on inspection, approval, marking and delivery to the carrier, and property passed to the buyer at that stage. The taking of transit insurance by the seller did not, by itself, keep ownership with the seller, because the contract displaced the general rule that risk follows property. On these facts, the transfer of possession and sale occurred at Delhi/New Delhi within the meaning of the excise law.

Conclusion: The place of removal was Delhi/New Delhi, and freight and insurance charges for transport beyond that point were not includible in the assessable value.

Ratio Decidendi: Where property in goods passes to the buyer on appropriation and delivery to the carrier under the contract, the place where possession is transferred is the place of removal, and transit freight and insurance beyond that point are not part of the assessable value.

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