Cenvat credit on outward GTA transport depends on place of removal and whether sales were actually on FOR terms.

Cenvat credit on GTA services used for outward transport turns on the place of removal, which must be determined by when property in the goods passes under the sale contract and the Sale of Goods Act. Circulars relied on link credit eligibility to that factual and legal enquiry, rather than to freight, insurance, or risk-bearing arrangements alone. Where sales are claimed on FOR basis, the actual terms of supply must be examined to verify whether delivery to the buyer's premises forms part of the sale. If that FOR basis is established, credit is admissible; the matter was remitted for fresh examination of that limited factual issue.

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Issues: Whether Cenvat credit of GTA services used for transport of goods to the buyers' premises was admissible where the sales were claimed to be on FOR basis and, if so, whether the matter required re-examination by the original authority.

Analysis: The entitlement to credit depended on determining the place of removal with reference to the point at which sale took place and property in the goods passed from seller to buyer. The circulars relied upon linked admissibility of credit to the place of removal and required the sale and transfer of property in goods to be ascertained under the Central Excise Act and the Sale of Goods Act. Since the FOR basis plea was raised for the first time before the Tribunal, the factual question whether the sales were actually on FOR terms had not been examined by the lower authorities and had to be verified on remand.

Conclusion: The issue was remitted to the original authority for fresh examination of whether the goods were supplied on FOR basis. If that factual position is established, Cenvat credit is to be allowed.

Final Conclusion: The impugned order was set aside and the matter was sent back for reconsideration on the limited factual question governing credit eligibility.

Ratio Decidendi: Cenvat credit on outward transportation depends on the place of removal, which must be determined by when property in the goods passes under the sale contract and the Sale of Goods Act, not merely by freight, insurance, or risk-bearing arrangements.

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