Cenvat credit on outward freight is admissible when factory-gate removal and Board circular conditions are satisfied.

Cenvat credit on service tax paid for outward freight under GTA service was admissible where goods were cleared from the factory gate, no depot or warehouse sale was involved, and the freight formed part of the assessable value on which excise duty was paid. The Board circular dated 23.08.2007 governed credit on outward freight, and compliance with its conditions entitled the assessee to credit, even for a period preceding the circular. The assessee therefore remained eligible for credit and the favourable finding was upheld.

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Issues: Whether Cenvat credit on service tax paid on outward freight/GTA service from the factory gate to the buyer's premises was admissible when the conditions of the Board circular were satisfied.

Analysis: The respondent cleared goods only from the factory gate, and there was no sale through depots or warehouses. The transaction value reflected the contractual price, and the freight element formed part of the assessable value on which excise duty was paid. The Board circular dated 23.08.2007 laid down the conditions governing credit on outward freight, and the respondent satisfied those conditions. The cited High Court decision was followed to hold that even where the period preceded the circular, compliance with its parameters entitled the assessee to credit.

Conclusion: Cenvat credit on the outward freight service was admissible and the finding in favour of the assessee was upheld.

Ratio Decidendi: Where the place of removal is the factory gate and the assessee satisfies the conditions prescribed in the Board circular governing outward freight, service tax paid on GTA service is eligible as Cenvat credit.

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