Ex-factory price and distribution charges: separately recovered post-manufacturing costs were excluded from excise assessable value.

Distribution charges separately recovered over and above the Government-fixed ex-factory price were not includible in the assessable value for excise duty. The ex-factory price was treated as the factory-gate price, and the separately charged distribution expenses were regarded as permissible post-manufacturing expenditure rather than part of the price realised at the factory. As they were not shown to form part of the ex-factory price, they could not be absorbed into the assessable value.

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Issues: Whether the distribution charges collected over and above the Government-fixed ex-factory price were includible in the assessable value for excise duty.

Analysis: The Government order fixed both the ex-factory price and the retail price. The amount separately recovered as distribution charges represented permissible post-manufacturing expenditure and was not shown to be part of the ex-factory price. A price described as ex-factory price signifies a factory-gate price, and distribution expenses cannot be absorbed into that price or into the assessable value.

Conclusion: The distribution charges were not includible in the assessable value.

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