Place of removal on FOR sales can extend to customer premises, supporting Cenvat credit on outward freight.

On FOR sales where freight is included in the assessable value and the manufacturer bears transit risk until delivery at the customer's premises, the place of removal may extend beyond the factory gate. The note explains that the relevant place of removal depends on the transaction terms, including when property in the goods passes and who bears risk during transit. Where contractual terms and customer declarations show delivery is completed only at the customer's premises, that location can be treated as the place of removal, supporting Cenvat credit on outward freight.

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Issues: Whether, on sales made on FOR basis with freight included in the assessable value and transit risk borne by the manufacturer till delivery at the customer's premises, the place of removal was the customer's premises so as to allow Cenvat credit on outward freight.

Analysis: The appeal concerned credit on service tax paid on outward transportation from the factory gate or depot to customers' premises. The Tribunal noted that the assessee's sales were on FOR basis, freight formed part of the sale value, duty had been paid on that composite value, and the contractual terms and customer declarations supported the claim that property in the goods passed only on delivery at the customer's premises. Relying on its earlier decision in the assessee's own case and the connected High Court reasoning, it held that the place of removal depends on the transaction and is not invariably the factory gate. Where delivery is at the customer's premises and the manufacturer bears the transit risk, the customer's premises constitute the place of removal.

Conclusion: The assessee was entitled to treat the customer's premises as the place of removal and to avail Cenvat credit on the outward freight.

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