Outward transportation up to the place of removal qualified as input service for CENVAT credit before 01.04.2008.

For the period before 01.04.2008, outward transportation of finished goods up to the place of removal was treated as part of input service under Rule 2(l) of the CENVAT Credit Rules, 2004. The pre-amendment definition included clearance of final products from the place of removal, so service tax paid on GTA services for delivery to the buyer's premises was considered eligible for CENVAT credit. The passing of title at the buyer's end was held immaterial to this limited issue. On that basis, credit was regarded as admissible for the relevant period and the Revenue's challenge failed.

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Issues: Whether service tax paid on transportation of goods from the factory or other place of removal to the buyer's premises constituted input service for the purpose of CENVAT credit for the period prior to 01.04.2008.

Analysis: The relevant definition of input service under Rule 2(l) of the CENVAT Credit Rules, 2004, as it stood before the amendment effective from 01.04.2008, included clearance of final products from the place of removal. On that pre-amendment formulation, outward transportation of finished goods up to the place of removal was treated as part of the eligible service. The ownership or title of the goods passing at the buyer's end was held to be immaterial for the limited issue before the Tribunal. Reliance was placed on the settled interpretation that transportation charges for removal and delivery of final products up to the place of removal fall within the ambit of input service.

Conclusion: CENVAT credit on service tax paid on GTA service for transportation of goods to the buyer's premises was admissible for the relevant period, and the Revenue's appeal was rejected.

Ratio Decidendi: For the period prior to 01.04.2008, outward transportation of finished goods up to the place of removal falls within input service and qualifies for CENVAT credit under Rule 2(l) of the CENVAT Credit Rules, 2004.

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