FOR destination sales support Cenvat credit on outward freight and godown rent when the customer's premises are the place of removal.

For FOR destination sales, the customer's premises can be treated as the place of removal where ownership and transit risk remain with the supplier and freight to that point forms part of the price. The invoices described the sales as FOR destination basis, duty was paid on the price including freight, and the absence of insurance charges alone did not disprove supplier-borne transit risk. On those facts, outward freight up to the customer's premises qualified for Cenvat credit. Godown rent was also eligible because the service was used before removal of the goods and for storage of inputs.

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Issues: Whether the assessee was entitled to Cenvat credit on outward freight and godown rent on the footing that the sales were FOR destination sales and the customer's premises constituted the place of removal.

Analysis: The relevant test for FOR destination sale, as applied from the Board circular, is whether ownership during transit remains with the supplier, the risk of loss or damage during transit is borne by the supplier, and freight up to the customer's premises forms an integral part of the price. The invoices described the sales as FOR destination basis and duty had been paid on the price including freight. The absence of insurance charges by itself did not establish that the supplier had not borne transit risk. On these facts, the customer's premises had to be treated as the place of removal. Once that was so, outward freight up to that point qualified for credit, and the godown rent was also eligible because the service was used before removal of the goods and for storage of inputs.

Conclusion: The assessee was entitled to Cenvat credit on both outward freight and godown rent.

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