CENVAT credit on inward goods transport service allowed where consignor arranged freight for factory-bound inputs.

CENVAT credit was admissible on service tax paid for goods transport used to bring inputs and materials to the factory, because inward transportation for manufacture falls within the scope of input service under Circular No. 97/8/2007 dated 23.08.2007. The fact that the consignor arranged the transport and paid the tax on behalf of the assessee did not change the position that the assessee was the recipient of the transport service for factory-bound inputs. Denial of credit was therefore unsustainable.

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Issues: Whether CENVAT credit was admissible on service tax paid on goods transport service for inward transport of inputs and materials to the factory where the transport was arranged by the consignor on behalf of the appellant.

Analysis: The service was treated as inward transportation of inputs for the manufacture of excisable goods, which falls within the scope of input service as clarified by Circular No. 97/8/2007 dated 23.08.2007. The fact that the consignor facilitated the transport and paid the service tax on the appellant's behalf did not alter the position that the appellant was the recipient of the transport service for its factory-bound inputs.

Conclusion: CENVAT credit was admissible to the appellant on the transportation charges, and the denial of credit was unsustainable.

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