JUDGMENT

S.B. Sinha, J. —

1. Whether ‘freight’ and ‘insurance charges’ constitute the value of the goods for the purpose of computation of Excise Duty in terms of Central Excise Act, 1944 (for short, “the Act”) and the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (for short, “the Rules”) is the question involved in this appeal.

2. Respondent is engaged in the manufacture of ‘electric meters’ and parts thereof falling under Chapter Sub-heading No. 9028.00 and 9033.00 of First Schedule to the Central Excise Tariff Act, 1985. Its customers, inter alia, are various State Electricity Boards constituted and incorporated under the Electricity (Supply) Act, 1948. Indisputably, the State Electricity Boards in terms of advertisements issued in this behalf called for quotation for supply of electric meters. The value of the electric meters was to be fixed as at the factory gate. Freight and the insurance charges, however, as stipulated therein, were to be charged on an average basis and not on actuals.

Inter alia on the premise that the manufactured goods were actually delivered to the purchasers at their premises and not at the factory gate, a notice dated