Excise duty calculation on additional material

Hello Experts,

I confused on excise duty calculation in below case.

One customer provided material on free of cost basis.

He has not generated any invoices on us. But when we manufactured finished goods and raised invoice on huim, we calculated excise on our basic value of our product + provided material cost then CST on our basic value of product.

E.g. Basic product cost -    2,00,000.00/-

Additional mate. cost -       1,00,000.00/-  (material is on free of cost basis)

Assessable value -             3,00,000.00/-

  So , Excise duty -               37,500.00/-

CST -                                    4,000.00/-

Gross value -                     3,41,500.00/-

So, kindly suggest is it correct ?

Thanks & Regards,

Pankaj