Factory-gate sale not proved, so transportation charges could not be disallowed from sale price for excise valuation.

Where the department fails to establish that sales took place at the factory gate, transportation charges cannot be disallowed from the sale price for valuation under section 4 of the Central Excises and Salt Act, 1944. The respondents asserted that goods were delivered at dealers' premises, and the department could not produce the relevant price list or otherwise prove factory-gate sales. On that basis, the Tribunal found no support for the revision show cause notice and declined to disallow the transportation deduction.

---

---

Issues: Whether deduction of transportation cost from the sale price could be disallowed on the footing that the assessable value was ascertainable at the factory gate.

Analysis: The respondents maintained that there was no factory-gate sale and that the goods were delivered at the dealers' premises. The department was unable to produce the relevant price list or otherwise establish that the goods were in fact sold at the factory gate. In the absence of proof to support the revision show cause notice, the Tribunal found no basis to disallow the transportation deduction.

Conclusion: The revision show cause notice was discharged and the appeal was dismissed, in favour of the respondents.

Ratio Decidendi: Where the department fails to establish a factory-gate sale, transportation charges cannot be disallowed from the sale price for assessment under section 4 of the Central Excises and Salt Act, 1944.

---