Cenvat credit on outward freight upheld where undisputed facts showed use up to the place of removal.

Cenvat credit on service tax paid for outward freight was held admissible where the freight related to removal of goods up to the factory gate or place of removal. The lower authority's finding that the service was used for clearance of the final product from the factory was undisputed, and the appellate authority had no basis to disallow credit without contradicting that factual finding. The denial of credit was therefore unsustainable, and the adjudicating authority's allowance of credit was restored.

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Issues: Whether credit of service tax paid on outward freight was admissible where the freight was incurred up to the factory gate or place of removal.

Analysis: The lower authority had recorded a clear finding that the outward freight was paid in relation to removal of goods from the place of removal and that the service was used for clearance of the final product from the factory. That factual finding was not disputed by the Department. In these circumstances, the appellate authority had no basis to deny the credit, and the impugned order could not be sustained.

Conclusion: The credit of service tax on outward freight was admissible and the denial of such credit was unsustainable, in favour of the assessee.

Final Conclusion: The impugned order was set aside and the credit allowed by the adjudicating authority was restored.

Ratio Decidendi: Where outward freight is incurred up to the place of removal and the factual basis for such use is undisputed, the credit cannot be denied merely by appellate reversal without contradicting that finding.

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