CENVAT credit on outward transportation is examined against the input service definition, Larger Bench ruling, and rule amendment.

The note examines eligibility of CENVAT credit on service tax paid for outward transportation from the place of removal, focusing on the scope of "input service" under Rule 2(l), the effect of the Larger Bench decision, and the amendment to Rule 2(l)(ii) effective from 01.04.2008. It records submissions that the factual setting in each appeal may affect entitlement and that credit cannot be treated as exemption. The order also notes the pending stay petition before the Karnataka High Court and the request to defer further hearing. The matter was adjourned pending that decision.

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Issues: Whether credit of service tax on outward transportation from the place of removal was available in the light of the Larger Bench decision and the amendment to the relevant rule with effect from 01.04.2008, and whether the matter should be adjourned pending the Karnataka High Court's decision on the stay petition.

Analysis: The order records competing submissions on the scope of the definition of input service, the effect of the Larger Bench ruling, the relevance of the factual position in each appeal, and the impact of the amendment to Rule 2(l)(ii) of the CENVAT Credit Rules. The order also notes the contention that the grant of credit cannot be equated with exemption and that the stay petition before the Karnataka High Court was pending.

Outcome: The matter was adjourned to 12.11.2009 awaiting the Karnataka High Court's decision on the department's stay petition.

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