FOR destination sales support Cenvat credit on outward transportation up to the customer's destination.

For FOR destination sales, the place of removal extends to the customer's destination where the seller bears freight, insures the goods, and retains ownership until delivery. On those facts, outward transportation used up to delivery is treated as an input service connected with removal of the goods, so Cenvat credit is supportable under the governing circular. The text states that credit on outward transportation services was admissible and that the order allowing credit was sustained, with the Revenue's appeal failing.

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Issues: Whether Cenvat credit on outward transportation services is admissible where the goods are sold on FOR destination basis and the place of removal is the customer's destination.

Analysis: In a FOR destination sale, the place of removal extends to the destination of the goods. Where the seller bears transportation charges, insures the goods, and retains ownership until delivery, services used up to delivery are treated as input services linked to removal of the goods. On those facts, the credit claim is supported by the governing circular and is not defeated merely because the transportation occurs after clearance from the factory.

Conclusion: Cenvat credit on outward transportation services was admissible to the assessee.

Final Conclusion: The order allowing credit was sustained and the Revenue's appeal failed.

Ratio Decidendi: For FOR destination sales, outward transportation up to the customer's destination forms part of the service used up to the place of removal, making the related Cenvat credit admissible.

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