Honorable Tribunal in the matter of GUJARAT AMBUJA CEMENTS LTD. Versus COMMISSIONER OF C. EX., LUDHIANA reported in 2007 -TMI - 1132 - CESTAT,NEW DELHI (Central Excise) has held that Cenvat Credit of Service tax paid on outward transportation beyond the place of removal is not available.

Honorable Tribunal has held that the words "clearance of final products from the place of removal" as per rule 2(l) of the Cenvat Credit Rules, 2004 does not include the activity of "transportation from the place of removal".

The definition of place of removal has been provided in Section 4(3)(C) of the Central Excise Act, 1944

However, many sections in the field feel that in the coming days this decision is to be overruled by the Larger Bench of the Tribunal or the High Court / Supreme Court in due course.

Till than, one should be careful in availing cenvat credit on outward transportation beyond the place of removal.

Cenvat credit availability for service tax on outward transportation beyond place of removal held unavailable, advising caution in claims. Cenvat Credit for service tax on outward transportation beyond the place of removal is not available because rule 2(l) of the Cenvat Credit Rules, 2004 does not treat transportation from the place of removal as part of 'clearance of final products from the place of removal.' The statutory definition of place of removal appears in Section 4(3)(C) of the Central Excise Act, 1944. The decision may be revisited by a larger bench or higher forum, and claimants should be cautious in availing credit for such transportation services.