Broad input service interpretation allows Cenvat credit on outward transportation from the place of removal.

Outward transportation of final products from the place of removal was treated as an eligible input service under rule 2(l) of the Cenvat Credit Rules, 2004. Applying the Larger Bench ruling in ABB Ltd., the definition of input service was construed broadly in line with business requirements and was not confined narrowly to the factory or depot. On that construction, service tax paid on such outward transportation qualified for Cenvat credit, and the revenue challenge failed; the impugned order was upheld and the revenue appeal was rejected.

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Issues: Whether outward transportation of final products from the place of removal qualifies as an input service for the purpose of Cenvat credit under rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis: The issue stood covered by the Larger Bench decision in ABB Ltd., which held that the definition of input service must be interpreted in the light of business requirements and cannot be confined restrictively up to the factory or depot. Services used for outward transportation from the place of removal were treated as falling within the scope of input service, thereby permitting credit of the service tax paid on such services.

Conclusion: Outward transportation from the place of removal is an eligible input service, and credit is admissible. The revenue challenge therefore fails.

Final Conclusion: The impugned order was upheld and the revenue appeal was rejected.

Ratio Decidendi: The definition of input service under rule 2(l) of the Cenvat Credit Rules, 2004 must be construed broadly in the context of business requirements, and outward transportation of final products from the place of removal is covered by it.

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