Input service credit and outward freight credit require proof of sale-price inclusion and nexus with manufacture before allowance.

Service tax credit on outward freight for goods cleared on FOR basis depends on proof that freight forms part of the sale price or assessable value and satisfies the conditions in the applicable Board circular; where that factual verification is incomplete, entitlement cannot be finally determined. Credit on courier, general insurance, maintenance and repair, management consultant's and authorised service station services turns on establishing a nexus with manufacture or use in relation to manufacture; if the existing record does not properly test that nexus, fresh adjudication is required. The matter was therefore returned for verification and reconsideration on both categories of services.

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Issues: (i) Whether service tax credit was admissible on outward freight where the goods were cleared on FOR basis and the freight formed part of the sale price. (ii) Whether service tax credit on other services such as courier service, general insurance service, maintenance and repair service, management consultant's service and authorized service station service required fresh examination on the question of nexus with manufacture.

Issue (i): Whether service tax credit was admissible on outward freight where the goods were cleared on FOR basis and the freight formed part of the sale price.

Analysis: Credit on outward freight depends upon fulfilment of the conditions indicated in the Board's circular and on proof that the freight charges form part of the assessable value or sale price of the goods. Since that factual verification had not been completed, the entitlement could not be finally determined.

Conclusion: The issue was not finally decided and was sent back for verification by the adjudicating authority.

Issue (ii): Whether service tax credit on other services such as courier service, general insurance service, maintenance and repair service, management consultant's service and authorized service station service required fresh examination on the question of nexus with manufacture.

Analysis: Input service credit requires proof of nexus between the services and their use in or in relation to manufacture. The existing order did not adequately examine that nexus in light of the applicable legal principles, so reconsideration was necessary.

Conclusion: The issue was remitted for fresh adjudication after considering the applicable legal principles and hearing the appellants.

Final Conclusion: The denial of credit was not sustained in final form and the matters were returned to the adjudicating authority for a fresh decision on both categories of services.

Ratio Decidendi: Input service credit and freight-related credit can be allowed only after the relevant factual conditions and nexus requirements are established on proper verification.

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