CENVAT credit on outward GTA transport is admissible for FOR destination sales where buyer's premises are the place of removal.

For FOR destination sales where finished goods are sold with transportation included up to the buyer's premises, the buyer's premises may constitute the place of removal for outward transport. On those facts, service tax paid on Goods Transport Agency service used to carry the goods from the factory gate to the customer's premises is admissible as CENVAT credit. The operative effect is that credit is available when the pricing structure and delivery terms show that delivery at destination forms part of the sale and the outward transportation is integrally connected with clearance of the goods.

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Issues: Whether cenvat credit of service tax paid on Goods Transport Agency service used for outward transportation of finished goods on FOR destination basis is admissible where the goods are delivered at the buyer's premises.

Analysis: The goods were sold on FOR destination basis and the transportation charges were incurred from the factory gate to the customer's premises. On the facts accepted in the record, the sale price included the element of transportation up to the buyer's premises and the goods were cleared under a pricing structure consistent with delivery at destination. In such circumstances, the buyer's premises constituted the place of removal for outward transportation, and credit of service tax paid on GTA service used for that transportation was allowable.

Conclusion: The credit was admissible and the issue was decided in favour of the assessee.

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