Cenvat Credit on outward freight - delivery is on FOR basis - place of removal

[chaganti srinivas]

Dear Sirs, We are availing service tax credit on outward freight charges based on the terms of Purchase order which were 'FOR destination.'. In one particular customer terms mentioned as 'Insurance covered by us'. Hence department denied cenvat credit of outward freight on that particular customer transactions. Can we contest on this issue?. Besides, we are also charging Freight for some customers in the invoice. Is it necessary to include this amount also in assessable value? - Please provide your valuable opinion.

AI Summary

Cenvat credit on outward freight depends on FOR destination removal and inclusion of freight in assessable value.
Cenvat credit on outward freight is disallowed when freight relates to movement beyond the place of removal; credit depends on demonstrating a FOR destination sale so removal is at the buyer's premises, with factual issues like insurance allocation affecting entitlement and freight being includible in assessable value if the transaction is treated as inclusive of freight.