Cenvat credit turns on statutory eligibility and place of removal, with outward freight allowed on FOR sales basis.

Cenvat credit on tube light fittings classified under Chapter 94 was not available as capital goods because the goods were received and invoiced as Chapter 94 items, outside the specified eligibility chapters. Credit on Service Tax paid on outward transportation of finished goods was admissible where the sale was on FOR basis and the buyer's premises constituted the place of removal; on that footing, outward freight credit up to 31-3-2008 was allowed. The document applies the principle that Cenvat eligibility depends on the statutory definition of the goods or service claimed, and that place of removal governs admissibility of outward transportation credit.

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Issues: (i) Whether tube light fittings classified under Chapter 94 were eligible for Cenvat credit as capital goods; (ii) Whether Service Tax paid on outward transportation of finished goods was admissible as Cenvat credit.

Issue (i): Whether tube light fittings classified under Chapter 94 were eligible for Cenvat credit as capital goods.

Analysis: The goods were admittedly supplied and invoiced as tube light fittings under Chapter 94 of the Tariff. Nothing on record showed that the appellant had received any different item or that the classification adopted by the supplier could be ignored for credit purposes. Since the Cenvat scheme restricted the relevant capital goods category to goods falling within the specified chapters, the fittings could not be treated as eligible capital goods on the facts presented.

Conclusion: The denial of Cenvat credit on tube light fittings was upheld and this issue was decided against the assessee.

Issue (ii): Whether Service Tax paid on outward transportation of finished goods was admissible as Cenvat credit.

Analysis: The credit on outward freight had to be examined in light of the place of removal and the nature of the sale arrangement. The Tribunal's earlier view, along with the Board circular relied upon in the reasoning, supported admissibility where the sale was on FOR basis and the buyer's premises constituted the place of removal. Applying that principle, the outward transportation credit up to 31-3-2008 was held admissible.

Conclusion: The credit on outward transportation was allowed in favour of the assessee to the extent held admissible.

Final Conclusion: The appeal succeeded only in part, with relief granted on the outward freight credit while the disallowance of credit on tube light fittings was sustained.

Ratio Decidendi: Cenvat credit depends on the statutory eligibility of the goods or service as claimed under the applicable definitions, and outward freight is admissible where the sale contract shows the buyer's premises as the place of removal.

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