Cenvat credit on outward transportation was admissible for FOR sales where freight formed part of assessable value.

Cenvat credit on outward transportation service was treated as admissible where sales were on FOR basis and the transportation cost formed part of the assessable value. On those facts, outward transportation was regarded as part of the transaction up to the place of removal, supporting credit eligibility. The Tribunal also relied on C.B.E. & C. Circular No. 97/8/2007 dated 23-8-2007, and held that contrary decisions cited by the parties did not displace the facts-based view adopted in this case. The denial of credit was therefore unsustainable.

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Issues: Whether Cenvat credit on outward transportation service was admissible when the goods were sold on FOR basis and the transportation cost was included in the assessable value.

Analysis: The transportation cost was included in the assessable value of the goods and the sales were on FOR basis. In that situation, outward transportation formed part of the transaction up to the place of removal. The claim for credit was also supported by C.B.E. & C. Circular No. 97/8/2007 dated 23-8-2007, and the contrary decisions cited by the parties did not prevent the Tribunal from taking its own view on the facts of the case.

Conclusion: Cenvat credit on outward transportation service was admissible. The assessee succeeded and the denial of credit was unsustainable.

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