Outward freight credit up to place of removal qualifies as input service where delivery terms keep risk with seller.

Cenvat credit on service tax paid for outward freight up to the place of removal was treated as admissible input service where the sale contract showed that ownership and risk remained with the seller until delivery and freight formed part of the price. Transportation up to the place of sale fell within the inclusive scope of the input service definition, so credit could not be denied merely because the service related to movement beyond the factory gate. The Revenue's challenge therefore failed.

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Issues: Whether Cenvat credit of service tax paid on outward freight from the factory gate up to the place of removal was admissible as input service.

Analysis: The definition of input service was applied in the context of clearance of final products from the place of removal. Where the sale contract shows that ownership and risk remain with the seller till delivery and freight forms part of the price, transportation up to the place of sale falls within the scope of input service. The settled legal position recognized that outward transportation up to the place of removal is covered by the inclusive part of the definition, and credit cannot be denied merely because the service relates to transportation beyond the factory gate.

Conclusion: The credit of service tax paid on outward freight up to the place of removal was held admissible, and the Revenue's challenge failed.

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