Cenvat credit on GTA freight is available when FOR destination terms keep risk with the seller and freight forms part of price.

Cenvat credit on GTA service for freight on ex-factory transportation is available where sales are on FOR destination basis and freight forms part of the price. The Commissioner (Appeals) found that ownership did not pass until delivery, the seller bore the transit risk, and the freight was included in the assessable value; those findings were not effectively challenged. Relying on the Board's circular and the cited High Court ruling, the position was that the statutory conditions for credit were prima facie met. The stay applications were therefore correctly rejected, and the respondent was prima facie entitled to the credit.

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Issues: Whether the department was entitled to stay of operation of the Commissioner (Appeals)' order granting Cenvat credit on GTA service in respect of freight on ex-factory transportation of excisable goods.

Analysis: The Commissioner (Appeals) had found that the sales were on FOR Destination basis and that freight formed an integral part of the price. Those findings were not effectively challenged. The Board's circular and the cited High Court decision were relied upon to note that Cenvat credit on GTA service is available where ownership does not pass till delivery, the seller bears the transit risk, and freight is part of the assessable value. On the facts found, those conditions were prima facie satisfied.

Conclusion: The stay applications were rightly rejected and the respondent was prima facie entitled to the Cenvat credit.

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