2026-VIL-67-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - CENVAT credit on outward transportation, Free on Road (FOR) destination basis, Place of removal - The goods were sold on a Free on Road (FOR) destination basis and the cost of transportation was included in the assessable value on which duty was paid. The Principal Commissioner upheld the respondent's claim for CENVAT credit, relying on the inclusion of transportation cost in the assessable value and a Board Circular dated 08.06.2018 - Whether the respondent is entitled to CENVAT credit of service tax paid on outward transportation of goods when the sales are on an FOR destination basis and the transportation cost is included in the assessable value – HELD - Where goods are sold on an FOR destination basis, the place of removal is considered to be the buyer's doorstep, as the seller remains responsible for delivery and bears the risk until the goods reach the customer, and property in the goods passes at the customer's location. The inclusion of transportation costs in the assessable value, upon which duty was paid, further supports the contention that the transfer of goods effectively occurs at the buyer's premises. CENVAT credit on service tax paid for goods transport agency services for outward transportation of finished goods up to the buyer's place is admissible under Rule 2(l) of the CENVAT Credit Rules, 2004. The similar matters involving the same principle had previously been decided in favor of assessees and even upheld by High Courts – The Respondent is entitlement to CENVAT credit of the service tax paid on the outward transportation of goods - The Department's appeal is dismissed
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