Honorable tribunal has reversed the order of Commissioner (Appeal) in the matter of COMMISSIONER OF C. EX., INDORE Versus N.H.K. SPRINGS LTD. reported in 2007 -TMI - 1165 - CESTAT NEW DELHI (Central Excise Section).  In its order, honorable tribunal has held that, Cenvat Credit of Service Tax paid on Outward transportation is not allowed. The removal of the final products from the factory premises, so as to clear the factory premises of such goods, would be clearance, and outward transport beyond the place of removal, cannot be read in the word 'clearance'.

Earlier, commissioner (appeals) has allowed the appeal of NHK Springs Ltd. reported in 2006 -TMI - 752 - COMMISSIONER OF C.E. (APPEALS) (Central Excise Section) by holding that Service Tax paid on outward transportation from the place of removal is allowed as Cenvat Credit. 

Cenvat credit on outward transportation denied where transport beyond the place of removal falls outside the meaning of clearance and is ineligible. Cenvat Credit for service tax on outward transportation is disallowed where transportation occurs beyond the place of removal, because clearance denotes the removal of final products from factory premises to clear those premises; transport after that point falls outside the statutory meaning of clearance and is therefore not eligible for Cenvat credit, reversing a prior appellate allowance.