FOR basis sales and buyer-premises removal point made outward freight eligible for CENVAT credit.

CENVAT credit on service tax paid for outward freight was held admissible where goods were sold on FOR basis and freight formed part of the sale price. The contractual terms showed that ownership passed only at the buyer's premises, the seller retained transit risk, and transportation charges were embedded in the consideration. On those facts, the buyer's premises were treated as the place of removal under Rule 2(l) of the CENVAT Credit Rules, 2004, so outward transportation up to that point qualified as an input service. The denial of credit was therefore unsustainable.

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Issues: Whether CENVAT credit of service tax paid on outward freight from the factory gate to the buyer's premises was admissible where the sale was on FOR basis and the freight formed part of the sale price.

Analysis: The purchase order showed that transportation charges were included in the price, the goods were sold on FOR basis, the ownership and property in the goods passed only at the buyer's doorstep, the seller bore the transit risk, and the freight charges formed an integral part of the price. In such circumstances, the buyer's premises constituted the place of removal for the purpose of Rule 2(l) of the CENVAT Credit Rules, 2004. The conditions recognized in the Board Circular were satisfied, and the cited precedent supported credit on GTA services for outward transport up to the buyer's premises.

Conclusion: The denial of CENVAT credit on outward freight was unsustainable, and the credit was admissible in favour of the assessee.

Ratio Decidendi: Where goods are sold on FOR basis and the contractual terms show that ownership passes at the buyer's premises, transit risk remains with the seller, and freight is part of the sale price, outward transportation up to the buyer's premises is attributable to the place of removal and qualifies as input service for CENVAT credit.

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