Place of removal controls Cenvat credit on courier services when goods remain under seller control until delivery.

Cenvat credit on courier service was held admissible where goods were dispatched through courier and remained under the seller's control until delivery. Charging CST, by itself, did not establish a factory-gate sale, because CST may also arise in inter-State sales. The decisive factor was the place of removal: on the facts, the buyer's premises were treated as the place of removal since undelivered goods were returnable to the seller and delivery had not shifted risk or control earlier. The circular relied upon was consistent with this position, supporting entitlement to credit on the courier service used for dispatch.

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Issues: Whether Cenvat credit on courier service was admissible when the goods were dispatched through courier and the place of buyer was to be treated as the place of removal.

Analysis: The denial of credit was founded on the premise that charging CST necessarily showed sale at the factory gate. The Court held that charging CST does not, by itself, establish factory-gate sale, since CST is required in inter-State sales. The decisive factor was the place of removal. On the facts, the goods were sent through courier and remained under the appellant's control until delivery to the buyer, with undelivered goods returnable to the appellant. In these circumstances, the buyer's premises constituted the place of removal, and the circular relied upon supported entitlement to credit.

Conclusion: The appellant was entitled to avail Cenvat credit on courier service.

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