Central excise valuation excludes freight and transit insurance where Section 4 applies despite partial exemption under Notification No. 120/75.

Section 4 of the Central Excises and Salt Act, 1944 governed valuation, so freight and transit insurance could not be added to the assessable value merely because the assessee opted for partial relief under Notification No. 120/75. The notification was treated as an exemption measure and not as authority to expand assessable value beyond the statutory valuation base. Freight and insurance therefore remained outside the assessable value, and the demand founded on their inclusion was unsustainable.

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Issues: Whether freight and transit insurance could be included in the assessable value for central excise duty merely because the assessee had opted for assessment under Notification No. 120/75 dated 30-4-1975.

Analysis: Notification No. 120/75 was treated as an exemption notification granting partial relief from duty and not as a basis for enlarging the assessable value beyond the scope of Section 4 of the Central Excises and Salt Act, 1944. Freight and insurance were held to be outside the purview of assessable value under Section 4, and their inclusion could not be justified on the ground that invoice value had been adopted under the notification.

Conclusion: Freight and transit insurance were not includible in the assessable value, and the demand raised on that basis was unsustainable in favour of the assessee.

Ratio Decidendi: Where Section 4 governs valuation, freight and insurance cannot be added to assessable value merely because the assessee availed partial exemption under Notification No. 120/75 dated 30-4-1975.

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