Transit insurance charges recovered from buyers are not part of assessable value when they cover transportation risk.

Insurance charges collected from buyers to cover transit loss or damage were treated as part of transit cost, not as part of the assessable value under Section 4 of the Central Excise Act, 1944. The analysis followed prior Tribunal precedent that amounts recovered towards insurance do not become assessable value merely because they are collected from buyers, so long as they are not retained as part of the price of the goods. On that basis, the insurance charges were held not includible in assessable value.

---

---

Issues: Whether insurance charges collected from buyers for covering loss or damage during transit of goods are includible in the assessable value under Section 4 of the Central Excise Act, 1944.

Analysis: The issue was treated as covered by prior Tribunal precedent holding that insurance charges incurred to cover transit risk form part of the cost of transit and are not to be included in the assessable value. The decision also noted the view that amounts collected towards insurance, where not retained as part of the value of the goods, do not become assessable value merely because they are recovered from buyers.

Conclusion: The insurance charges were held not includible in the assessable value, and the assessee succeeded.

---