Cenvat credit on outward freight in FOR destination sales is admissible up to the place of removal.

In a Free on Road destination sale, admissibility of Cenvat credit on service tax paid on Goods Transport Agency service depends on whether the customers' premises qualify as the place of removal on the facts. Where the contract shows that ownership transfers at the destination and freight is part of the sale arrangement, outward transportation up to the customer's premises can fall within the place of removal. On that basis, credit on GTA service for outward freight up to the customer's premises was treated as admissible in such FOR destination transactions.

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Issues: Whether Cenvat credit of service tax paid on Goods Transport Agency service used for outward transportation of cement under a Free on Road destination contract from the factory or depot to customers' premises is admissible.

Analysis: The dispute turned on whether, in a FOR destination sale, the customers' premises constitute the place of removal for the purpose of credit on outward freight. The appeal was treated as covered by binding precedent and the Larger Bench view that, in FOR contract cases, the place of removal must be ascertained on the facts to determine admissibility of credit on GTA service up to that place.

Conclusion: Cenvat credit on GTA service for outward transportation up to the customers' premises in a FOR destination sale was held admissible, and the assessee succeeded.

Ratio Decidendi: In a FOR destination sale, Cenvat credit on outward freight is admissible up to the place of removal, which may extend to the customer's premises where ownership transfers there.

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