Cenvat credit on outward freight for exports remains admissible where the port is the place of removal.

Cenvat credit on outward freight for export clearances was held admissible because, in the export context, the place of removal extended up to the port. The goods were cleared for export on CIF terms, so transportation from the factory to the port formed part of clearance up to the place of removal. On that basis, outward GTA service remained within the scope of input service even after the amendment to the definition. The demand was therefore unsustainable.

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Issues: Whether Cenvat credit of service tax paid on outward freight for transportation of export goods from the factory to the port was admissible after the amendment to the definition of input service.

Analysis: The credit was disputed on the footing that outward transportation beyond the place of removal fell outside the amended definition of input service. The determinative question was whether, in the case of export, the place of removal extended up to the port. The goods were cleared for export, the export price was CIF, and the transportation from the factory to the port was part of the clearance of the goods up to the place of removal. On that basis, the outward GTA service continued to fall within the scope of input service even after the amendment.

Conclusion: Cenvat credit on outward GTA freight for export clearances was admissible and the demand was unsustainable.

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