In Brief
The Supreme Court upheld that manufacturers can claim Cenvat Credit for service tax paid on transportation of goods to customers' premises if three conditions are met: the seller retains ownership and risk until delivery at the buyer's location, and freight is part of the price. The Court found that the 'place of removal' under the Central Excise Act, 1944 and Cenvat Credit Rules can extend to the customer's location in such cases. Transportation costs 'from the place of removal'—whether the factory, warehouse, or customer destination—qualify as eligible input services. Dismissing the Revenue's appeals, the Court held that accepting the Department's restrictive interpretation would nullify the statutory language and improperly limit input service credit.
The lawyer headnote and full judgment text are available to registered users.