The Panorama of CENVAT Credit on Outward Transportation

Admissibility of credit on services used for clearance of final products beyond the factory premises has always
been a litigious issue. In case of Free-on-Road (‘FOR’) sales, the cost incurred in supply of goods beyond the
factory premises forms a part of the price of final product on which excise duty is discharged. Disallowance of
credit in such circumstances leads to cascading of taxes and frustrates the underlying objective of Credit
Rules. Recently, the Apex Court in CCE v. Ultratech Cement Limited [TS-19-SC-2018] (‘Ultratech Cement’)
dealt with a similar situation. Before drawing an analysis of the above judgement, it is pertinent to briefly chart
the background and the development of definition of term ‘input services’. 

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The Panorama of CENVAT Credit on Outward Transportation