Cenvat credit on outward freight stops at the place of removal, not buyers' premises.

Cenvat credit for outward transportation is confined to services used up to the place of removal. Read as a whole, Rule 2(l) of the Cenvat Credit Rules, 2004 allows credit for services connected with manufacture and clearance from the place of removal, but not for post-removal freight to buyers' premises. Extending credit beyond that point would be inconsistent with the statutory scheme and the valuation principle under Section 4 of the Central Excise Act, 1944. On that reasoning, service tax paid on transportation beyond the place of removal is not admissible as input service credit.

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Issues: Whether service tax paid on freight for transportation of cement from the place of removal to buyers' premises is admissible as Cenvat credit as input service.

Analysis: The definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004 was read as a whole and in context. Credit is available for services used in or in relation to manufacture and clearance of final products from the place of removal, while the inclusive part specifically refers to outward transportation only up to the place of removal. Post-removal freight for delivery to buyers' premises is not an input in manufacture, and extending credit beyond the place of removal would be inconsistent with the scheme of Cenvat credit and the valuation principle under Section 4 of the Central Excise Act, 1944. The textual and contextual reading required harmonious construction, not a disjunctive reading that would expand credit beyond the statutory limit.

Conclusion: Service tax paid on outward transportation beyond the place of removal is not eligible for Cenvat credit. The claim was correctly rejected and is against the assessee.

Final Conclusion: Cenvat credit on freight incurred for transportation to the buyers' premises was held inadmissible, so the challenge to the rejection of credit did not succeed.

Ratio Decidendi: Input service credit for transportation is confined to outward transportation up to the place of removal and cannot extend to post-removal freight to buyers' premises.

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