Post-removal freight and transit insurance are excluded from excise assessable value when factory-gate price is known.

Where the factory-gate wholesale price is ascertainable, freight, delivery, transportation and transit insurance incurred after removal of goods are excluded from the assessable value under central excise valuation rules. Separate recovery of these post-removal expenses from buyers does not change their character, and a buyer taking delivery at the factory gate is not treated differently from a buyer requiring delivery elsewhere for this purpose. The manufacturer may recover such incidental charges separately without their inclusion in assessable value, so the valuation must exclude them and a demand based on inclusion cannot stand.

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Issues: Whether freight, delivery, transportation and transit insurance charges recovered separately from buyers could be included in the assessable value for central excise purposes under Section 4(1)(a) of the Central Excises & Salt Act, 1944.

Analysis: Where the wholesale price at the factory gate is ascertainable, charges incurred after removal of the goods from the factory, including transport and transit insurance, are not part of the wholesale price. Separate recovery of such post-removal expenses from buyers does not alter their character as excludible charges for valuation. A buyer taking delivery at the factory gate and a buyer requiring delivery at another place are not different classes of buyers for this purpose, and the manufacturer is entitled to recover freight and incidental expenses separately without their inclusion in assessable value.

Conclusion: The charges towards freight, delivery, transportation and transit insurance were not includible in the assessable value, and the appeal succeeded in favour of the assessee.

Final Conclusion: The valuation was required to exclude post-removal transportation-related expenses separately recovered from buyers, and the demand based on their inclusion could not stand.

Ratio Decidendi: Under Section 4(1)(a) of the Central Excises & Salt Act, 1944, charges incurred after removal of goods from the factory, such as freight and transit insurance, are excludible from assessable value when the factory-gate wholesale price is known.

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