CENVAT credit on outward transportation services was remanded for fresh decision under the input service definition.

Entitlement to CENVAT credit on service tax paid on GTA and travel agency services used for outward transportation of semi-finished or finished goods depended on the scope of "input service" under rule 2(l) of the CENVAT Credit Rules, 2004, read with the Board circular dated 23-8-2007 and later precedents, including Ambuja Cements. As the lower authorities had not considered the subsequent authorities cited before the Tribunal, the controversy was not finally decided on merits. The impugned orders were set aside and the matter was remanded to the original authority for fresh decision after giving the assessee a reasonable opportunity of hearing.

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Issues: Whether CENVAT credit on service tax paid on GTA service and travel agency service used in connection with outward transportation of semi-finished or finished goods from the factory or depot was admissible, and whether the matter should be remanded for fresh decision.

Analysis: The entitlement to credit turned on the scope of the expression "input service" under rule 2(l) of the CENVAT Credit Rules, 2004, in the light of the relevant judicial precedents and the Board's circular dated 23-8-2007. The lower authorities had not had the benefit of the later authorities cited before the Tribunal. In view of the need to examine the claim afresh with reference to the circular, the High Court's ruling in Ambuja Cements and other cited decisions, the controversy was not finally decided on merits at this stage.

Conclusion: The impugned orders were set aside and the appeals were allowed by way of remand to the original authority for fresh decision, with a reasonable opportunity of hearing to the assessee.

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