CENVAT credit for outward freight to depots or branches was held admissible where stock transfer and documentary support were established.

CENVAT credit on service tax paid for outward transportation of goods from the factory to depots or branches was examined on the basis of whether the movement was a stock transfer and whether settled precedent and Board circulars supported eligibility. The documentary material was found to show that the goods were transferred to depots or branches, and the outward freight was treated as part of the eligible credit chain. Accordingly, the credit was held admissible and the disallowance was set aside.

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Issues: Whether CENVAT credit of service tax paid on outward transportation of goods from the factory to the depot or branch was admissible.

Analysis: The dispute turned on whether the freight related to clearance of goods to depots or branches as stock transfers, and whether the issue was covered by settled precedent and the applicable Board circulars. The Court found that the documentary material supported the assessee's case that the goods were transferred to depots or branches and that the outward freight formed part of the eligible credit chain.

Conclusion: CENVAT credit on outward transportation from the factory to depots or branches was held admissible, and the disallowance was set aside.

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