CENVAT Credit of Freight out ward

[Pradeep Jain]

Dear Sir,

 

We are availing CENVAT Credit of Service Tax on Freight out ward on despatch of finished goods.

Delivery condition is FOR . We are mentioning the Freight amount separately in the Excise Invoice and no excise duty is being charged on the Freight amount.

After making the freight we are paying the Service Tax on Freight out ward and availing the CENVAT credit on the basis of the Service Tax payment challan  since 2005.

In view of AG audit para Central Excise Department has issued us  SCN from 2008 to Sept.11 for availment of the said CENVAT Credit.

Pl. confirm the legal position about the availment of CENVAT Credit on the Freight out ward.with leatest judgements.

 

Best Regards

 

Pradeep Jain

AI Summary

Place of removal determines assessable value; freight is an input service and CENVAT credit permitted after payment of service tax.
When the place of removal is the buyer's destination, outward freight up to that destination is part of the assessable value and must be included in excise valuation. Outward freight paid to transporters is an input service; after payment of service tax the seller may avail CENVAT credit on that service, consistent with authority such as CCE v. Punjab Tractors.