CENVAT credit, place of removal and limitation turn on contract terms, buyer acceptance and disclosure in records.

CENVAT credit distributed through Input Service Distributor invoices remains open to scrutiny at the recipient unit, and its admissibility still depends on the input service definition and the surrounding facts. Courier services used to move finished goods to customers may qualify as input service where the contract makes delivery, installation, commissioning and buyer acceptance integral to supply. On those terms, the buyer's premises can be treated as the place of removal, and a boilerplate invoice clause on transit risk cannot displace the contract. Where credit was disclosed in statutory records and no wilful suppression or intent to evade was shown, the extended limitation period is not available, and interest and penalty cannot survive.

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Issues: (i) Whether CENVAT credit distributed through Input Service Distributor invoices could be denied to the recipient unit and whether proceedings could be initiated against it; (ii) whether courier services used for transportation of finished goods to customers qualified as input service under Rule 2(l) of the CENVAT Credit Rules, 2004; (iii) whether the place of removal in the facts of the case was the factory gate or the buyer's premises; (iv) whether the extended period of limitation was invocable and whether interest and penalty could survive.

Issue (i): Whether CENVAT credit distributed through Input Service Distributor invoices could be denied to the recipient unit and whether proceedings could be initiated against it.

Analysis: Credit passed through Input Service Distributor invoices does not confer immunity from scrutiny at the recipient unit. The admissibility of the credit must still be tested on merits with reference to the definition of input service and the facts surrounding the recipient's activity.

Conclusion: Proceedings against the recipient unit were not invalid merely because the credit came through Input Service Distributor invoices.

Issue (ii): Whether courier services used for transportation of finished goods to customers qualified as input service under Rule 2(l) of the CENVAT Credit Rules, 2004.

Analysis: The definition of input service covered services used for clearance of final products up to the place of removal. Where the contractual arrangement shows that delivery, installation, commissioning and acceptance at the customer's premises are integral to the supply, outward transportation up to that point falls within the scope of input service.

Conclusion: Courier services used for transportation up to the buyer's premises were capable of qualifying as input service, subject to the contractual terms governing the transaction.

Issue (iii): Whether the place of removal in the facts of the case was the factory gate or the buyer's premises.

Analysis: The contracts showed that commissioning was complete only upon acceptance by the buyer, installation was incomplete until full commissioning, and the supply itself was not treated as complete until installation, commissioning and acceptance. A printed invoice clause disclaiming transit risk could not override the substantive contractual terms. On those terms, property and completion of sale occurred only at the customer's site.

Conclusion: The place of removal was the buyer's premises where the ATMs were installed, commissioned and accepted.

Issue (iv): Whether the extended period of limitation was invocable and whether interest and penalty could survive.

Analysis: The assessee had disclosed the credit in statutory records and the dispute turned on interpretation of the input service definition and place of removal. In the absence of wilful suppression or intent to evade duty, the extended period could not be invoked. Once the demand was time-barred, the consequential demand of interest and penalty also could not stand.

Conclusion: The extended period of limitation was not invocable and the demand, interest and penalty were barred.

Final Conclusion: The impugned order was set aside and the appellant obtained relief on the ground that the demand was not sustainable in law, particularly because the extended limitation period could not be applied.

Ratio Decidendi: Where the contract shows that delivery, installation, commissioning and acceptance at the buyer's premises are integral to the supply, the buyer's premises may constitute the place of removal for credit on outward transportation, and the extended period cannot be invoked without wilful suppression or intent to evade duty.

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