Input service treatment for GTA transport to export port allowed where FOB terms make the port the place of removal.

FOB export sales left ownership with the seller until loading on the ship, so the port of export was treated as the place of removal. GTA service used to transport final products from the factory to that place therefore fell within the definition of input service under rule 2(l) of the CENVAT Credit Rules, 2004. On that basis, CENVAT credit on service tax paid for such transport was admissible, consistent with earlier Tribunal rulings taking the same view.

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Issues: Whether CENVAT credit was admissible on service tax paid on GTA service used for transportation of the final product from the factory to the port for export.

Analysis: The goods were sold on FOB terms, indicating that ownership remained with the respondent until loading on the ship. On that basis, the port of export was treated as the place of removal. Service used for transporting the goods from the factory to the place of removal fell within the scope of input service under rule 2(l) of the CENVAT Credit Rules, 2004. The view was consistent with earlier Tribunal decisions taking the same position.

Conclusion: CENVAT credit was admissible, and the Revenue's appeal failed.

Ratio Decidendi: Where export goods are sold on FOB terms and the port is the place of removal, GTA service used for transport from the factory to that place qualifies as input service for CENVAT credit.

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