Excise on freight in excise invoice

Should Excise Duty paid on Freight ? Option 1. Place of Removal is Factory Gate. Option 2. On FOR Basic. Option 3. Debit Note raised by Mfg. for Freight. Note: At Excise Audit 2000 Auditors raise Demand of ED on Freight. Rule 5 Excise Valuation Rules, which allow a specific exclusion for the cost of transportation from the place of removal up to the place of delivery of such excisable goods. This is opened for Discussion here !!!