CENVAT credit on outward transportation depends on strict compliance with circular conditions; remand upheld for factual verification.

CENVAT credit on outward transportation of final products from the factory to the buyer's premises is available only if the conditions in the governing Board circular are strictly satisfied, as recognised by the controlling High Court and Larger Bench rulings. The entitlement turns on factual compliance with those conditions. Where the record does not show prior examination of that compliance by the lower authorities, remand for fresh adjudication is proper. On that basis, the challenge to the credit issue failed and the remand was sustained for reconsideration after hearing the assessee.

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Issues: (i) Whether CENVAT credit on outward transportation of final products from the factory to the buyer's premises was admissible on fulfilment of the conditions in the Board circular and the governing High Court/Larger Bench rulings. (ii) Whether the Commissioner (Appeals) was justified in remanding the matter for fresh adjudication to verify compliance with those conditions.

Issue (i): Whether CENVAT credit on outward transportation of final products from the factory to the buyer's premises was admissible on fulfilment of the conditions in the Board circular and the governing High Court/Larger Bench rulings.

Analysis: The common issue had already been settled against the Revenue by the High Court and the Larger Bench. The governing circular laid down conditions for availability of credit on outward transportation, and the controlling ruling treated the circular as having retrospective effect. The entitlement to credit therefore depended on factual compliance with those conditions.

Conclusion: Credit on outward transportation is admissible only if the prescribed conditions are satisfied, and the Revenue's challenge on that issue fails.

Issue (ii): Whether the Commissioner (Appeals) was justified in remanding the matter for fresh adjudication to verify compliance with those conditions.

Analysis: The record did not show any prior factual examination by the lower authorities as to whether the assessee had fulfilled the conditions governing the claim. In that situation, the direction for fresh adjudication was not shown to be erroneous.

Conclusion: The remand was upheld and the matter was sent back for fresh adjudication after hearing the assessee.

Final Conclusion: The Revenue's challenge to the grant of credit was rejected, while the assessee's appeals were disposed of by sustaining the remand for reconsideration of entitlement on the factual matrix.

Ratio Decidendi: CENVAT credit on outward transportation is allowable only upon strict fulfilment of the conditions prescribed in the governing circular, and where such compliance has not been examined, a remand for fresh adjudication is proper.

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