2026 (1) TMI 511 - AT - Central Excise

CENVAT credit on GTA outward freight for FOR destination goods to customs premises allowed for 2013-2017

The dominant issue was whether CENVAT credit was admissible on service tax paid on GTA services used for outward transportation of goods during 2013-14 to ... CENVAT credit of the service tax paid on the outward transportation of goods - period 2013-14 to June 2017 - HED THAT:- Reliance placed upon a decision of this Tribunal in M/s. Mangalam Cement Ltd. vs. Commissioner, Central Goods, Excise & Service Tax, Udaipur [2025 (10) TMI 1188 - CESTAT NEW DELHI] where it was held that 'The admissibility of CENVAT credit of service tax paid on goods transport agency availed for outward transportation of goods on FOR destination basis has been upheld in M/s Prism Johnson Ltd. [2024 (6) TMI 612 - CESTAT NEW DELHI]. In view of the aforesaid decision of the Tribunal in Mangalam Cement it has to be held that the Principal Commissioner committed no illegality in holding that the respondent was entitled to take CENVAT credit of Rs. 73.30 lakhs of the service tax paid on outward transportation of goods to the customs premises. The appeal filed by the department is, accordingly, dismissed. Issues: Whether the respondent is entitled to take CENVAT credit of service tax paid on goods transport agency services for outward transportation of finished goods sold on FOR destination basis for the period 2013-14 to June 2017.Analysis: The Tribunal examined applicability of the CENVAT credit regime to outward transportation services where sales are on FOR destination terms and the seller bears delivery responsibility and transit risk. The Principal Commissioner relied on the Board's Circular dated 08.06.2018 and relevant precedents of the Tribunal holding that where the contract terms and invoices show freight included in assessable value and delivery is to the buyer's premises, the place of removal is the buyer's premises and CENVAT credit of service tax on outward transportation is admissible. The Tribunal considered allied Division Bench decisions (including Mangalam Cement and Prism Johnson) which upheld admissibility of credit under Rule 2(l) of the CENVAT Credit Rules, 2004 in similar factual matrices and found those authorities applicable to the present case. The Tribunal therefore treated the Principal Commissioner's reasoning and the Board clarification as supporting the respondent's entitlement to credit.Conclusion: The respondent is entitled to take CENVAT credit of the service tax paid on outward transportation of goods for the period in question.