Excise valuation excludes separately charged freight beyond the place of removal, even in FOR sales, when invoiced separately.

Freight charges separately recovered in the invoice are excluded from the assessable value of excisable goods where the transportation cost is charged independently of the price of the goods and is beyond the place of removal. The valuation under Section 4 turns on transaction value, and freight is not includible merely because the sale is on FOR terms if the goods price and freight are shown separately. Applying settled valuation rules and precedent, contrary decisions were treated as factually distinguishable, and the duty demand, penalty and interest based on inclusion of such freight could not be sustained.

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Issues: Whether freight charges shown separately in the sale invoice are includible in the assessable value of excisable goods in ex-factory and FOR sales.

Analysis: The valuation of excisable goods under Section 4 proceeds on the basis of transaction value, and the transportation cost is excludible where it is charged separately and is in addition to the price of the goods. The legal position, as applied from the settled valuation rules and the binding precedent considered, is that freight beyond the place of removal does not form part of the assessable value merely because the goods are sold on FOR terms, so long as the freight is separately recovered and the sale price of the goods is distinct. The contrary decisions were held distinguishable on facts.

Conclusion: Freight charges separately shown in the invoice are not includible in the assessable value of the excisable goods. The issue is decided in favour of the assessee.

Final Conclusion: The duty demand, penalty, and interest founded on inclusion of separately charged freight in assessable value cannot be sustained.

Ratio Decidendi: Under the excise valuation scheme, separately charged transportation cost is excluded from assessable value when it is shown independently of the price of the goods and is not part of the price at the place of removal.

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