FOR destination freight qualifies as input service for Cenvat credit when title and risk remain with the seller until delivery.

On FOR destination sales, outward transportation up to the customer's premises forms part of the transaction where risk and title remain with the assessee until delivery, so service tax paid on such freight qualifies as input service under Rule 2(l) of the Cenvat Credit Rules, 2004. Denial of Cenvat credit on that basis is unsustainable, and credit is allowable on the outward transportation charges.

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Issues: Whether service tax paid on outward transportation of goods on FOR destination basis qualifies as input service under Rule 2(l) of the Cenvat Credit Rules, 2004, and whether denial of Cenvat credit was sustainable.

Analysis: The appeal was decided by following the settled position that, where sales are on FOR destination basis and the risk and title in the goods remain with the assessee till delivery at the customer's premises, outward transportation forms part of the transaction and the tax paid on such transportation is eligible for credit as input service.

Conclusion: The assessee was held entitled to Cenvat credit on outward transportation charges, and the demand confirming denial of credit was unsustainable.

Ratio Decidendi: On a FOR destination sale, outward transportation incurred up to the customer's premises qualifies as an input service for Cenvat credit purposes.

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