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Issues: Whether, on a FOR destination sale where freight and insurance are included in the assessable value and duty is paid thereon, the buyer's premises can be treated as the place of removal for the purpose of credit on outward GTA services.
Analysis: The place of removal under Section 4 of the Central Excise Act, 1944 depends on the factual terms of sale, including transfer of title, risk, freight, insurance, and the point at which the sale is completed. Where goods are sold on FOR destination basis, freight and insurance are borne by the seller, the transaction value includes such charges, duty is discharged on that value, and the risk remains with the seller till delivery, the buyer's premises constitute the place of removal. In such a situation, it is impermissible for the Department to accept the inclusive assessable value for valuation purposes and at the same time deny credit on GTA service used to transport the goods up to the place of removal. The Board circular also supports that eligibility of credit on outward freight depends on the facts and determination of the place of removal.
Conclusion: Credit on outward GTA service is admissible, and the buyer's premises is the place of removal on the facts found.
Ratio Decidendi: In a FOR destination sale where freight and insurance form part of the assessable value and ownership and risk remain with the seller until delivery, outward transportation up to the buyer's premises is used up to the place of removal and qualifies as input service.
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