CENVAT credit on outward freight allowed where FOR sales include freight in assessable value and transportation forms part of supply cost.

CENVAT credit on service tax paid for Goods Transport Agency services used to transport goods from the factory to customers' premises was held admissible where sales were on FOR basis and freight formed part of the assessable value. The Tribunal applied the earlier decision in the assessee's own case, which recognised outward freight as an eligible input service in such circumstances, and noted supporting High Court authority on the same issue. On that basis, the Revenue's challenge was rejected and the credit was allowed.

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Issues: Whether CENVAT credit of service tax paid on Goods Transport Agency services used for outward transportation of goods from the factory to customers' premises was admissible where the goods were sold on FOR basis and freight formed part of the assessable value.

Analysis: The appeal turned on the admissibility of credit on outward freight. The Tribunal noted that the identical issue had already been decided in the assessee's own case, holding that where sales are on FOR basis and the freight element is included in the assessable value, the service tax paid on such transportation is eligible for credit. The Tribunal also relied on the supporting view of the High Court in the related matter.

Conclusion: The credit was admissible and the Revenue's challenge failed.

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