Factory gate sale and post-sale freight charges are excluded from assessable value when transportation is at the customer's request.

Freight collected only for post-sale transportation at the customer's request is not includible in the assessable value when the sale is completed at the factory gate. The charge has no nexus with the transaction value under Section 4(1)(a) of the Central Excise Act, 1944, and Rule 5 of the Central Excise Valuation Rules, 2000 does not justify adding actual freight in such circumstances. The demand based on inclusion of freight charges could not be sustained, and the assessee succeeded on this issue.

---

---

Issues: Whether freight collected from customers for transportation of goods after a factory gate sale is includible in the assessable value for central excise purposes.

Analysis: The sale was completed at the factory gate, and the transportation charge was collected only at the request of customers for delivery at a different place. Such freight had no nexus with the transaction value under Section 4(1)(a) of the Central Excise Act, 1944. Rule 5 of the Central Excise Valuation Rules, 2000 did not justify inclusion of actual freight charges in the assessable value where the sale transaction itself stood completed at the factory gate.

Conclusion: The freight amount collected for transportation was not includible in the assessable value, and the assessee succeeded on this issue.

Final Conclusion: The demand based on inclusion of freight charges in the assessable value could not be sustained, and the appeal was allowed.

Ratio Decidendi: Freight collected for post-sale transportation at the customer's request is not part of the assessable value when the sale is completed at the factory gate and the charge has no nexus with the transaction value.

---