Cenvat credit on outward transportation was admissible before 01.04.2008, making the credit denial unsustainable.

Cenvat credit on service tax paid for outward transportation of final products from the place of removal to customers' destination was treated as admissible for periods prior to 01.04.2008. The denial of credit was held unsustainable because the relevant period fell before the statutory cut-off, and the issue was considered covered by the Karnataka High Court's view in ABB Ltd. The assessee's appeal consequently succeeded and the appellate order was set aside.

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Issues: Whether Cenvat credit of service tax paid on outward transportation of final products from the place of removal to the customers' destination was admissible for the period prior to 01.04.2008.

Analysis: The appellate authority had rejected the credit mainly on the basis that the Larger Bench view in ABB Ltd. was under challenge. The Court noted that the Karnataka High Court had since held that service tax paid on outward transportation was eligible for Cenvat credit for the period before 01.04.2008. Since the disputed period in the present case was prior to that date, the matter was treated as covered by that decision.

Conclusion: The credit was admissible prior to 01.04.2008, and the denial of credit was unsustainable.

Final Conclusion: The impugned appellate order was set aside and the assessee's appeal succeeded.

Ratio Decidendi: Cenvat credit on outward transportation from the place of removal was admissible for periods prior to 01.04.2008.

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