Cenvat credit on outward freight depends on seller ownership, transit risk, and freight being part of price; matter remanded.

Cenvat credit on outward freight and goods transport agency service depended on compliance with Circular No. 97/8/2007-ST, under which credit was available only where ownership of goods remained with the seller till delivery, transit risk stayed with the seller, and freight formed an integral part of the price. The purchase orders suggested delivery at the buyer's premises and inclusion of transportation cost in the assessable value, but the record lacked sufficient verification, including a chartered accountant's certificate on ownership during transit. The impugned order was set aside and the matter remanded for verification of the relevant documents and facts, with credit to be allowed if the conditions were established.

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Issues: Whether Cenvat credit on outward freight / goods transport agency service was admissible when the goods were transported to the buyer's premises and the conditions of Circular No. 97/8/2007-ST were required to be verified.

Analysis: The relevant circular was held applicable, and entitlement to input-service tax credit depended on satisfaction of the stated conditions, namely that ownership of goods remained with the seller till delivery, the risk during transit remained with the seller, and freight formed an integral part of the price. The available purchase orders indicated delivery at the buyer's end and inclusion of transportation cost in the assessable value, but the record did not contain sufficient verification, particularly in the absence of a chartered accountant's certificate regarding ownership during transit. The factual basis for eligibility therefore required further examination by the adjudicating authority.

Conclusion: The impugned order was set aside and the matter was remanded for verification of the relevant documents and facts, with credit to be allowed if the stated conditions were established.

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