In sales conducted on a Free On Road (FOR) destination basis where ownership transfers at the buyer's premises, the 'place of removal' shifts to the buyer's premises, making services used for delivery eligible for CENVAT credit as 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004.

PER: S.K. MOHANTY

Briefly stated, the facts of the case are that the appellants are engaged inter alia, in the manufacture of motor vehicle parts, falling under Chapter 87 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants avail CENVAT Credit of Central Excise duty paid on the inputs and service tax paid on the input services, used in or in relation to manufacture of the said final products. During the disputed period from April, 2009 to February, 2013, the appellants had availed CENVAT Credit of service tax paid on the courier services, which was disputed by the Department on the ground that as per the definition of ‘input service’ contained in Rule 2(l) of the CENVAT Credit Rules, 2004, the place of removal should be considered as the factory gate and since the courier service was utilized by the appellants beyond such place of removal, the CENVAT benefit is not available on such services. The matter arising out of the show-cause proceedings was adjudicated by the learned Commissioner of Central Excise, Pune-I, vide the impugned order dated 25.07.2014, wherein CENVAT Credit amounting to Rs.1,16,55,125/- availed by the appellants was disallowed. The impugned order has also confirmed the interest demand and imposed penalties on the appellants. Feeling aggrieved with the impugned order dated 25.07.2014, the appellants have preferred this appeal before the Tribunal.

2. Learned Advocate appearing for the appellant submitted that as per the contract entered into between the appellants and their buyers, the goods were sold on Free On Road (FOR) basis and that since the ownership/title of the goods were passed on by the appellants to the buyers at their factory gate, the courier services availed/utilized by the appellants should be considered as ‘input service’, in terms of the definition provided under Rule 2(l) of the Rules of 2004 read with Section 3 of the Central Excise Act, 1944. He further submitted that the transit insurance policy taken by the appellant from the insurance company also provides that the risk and responsibility for the goods in transit should be to the account of the appellants, till the same is delivered at the buyer’s premises. He has also relied upon the Final Order No. A/85191-85198/2026 dated 14.01.2026, passed by this Bench of the Tribunal, to state that the issue arising out of the present dispute with regard to availment of CENVAT credit of the service tax paid on courier service is no more res integra.

3. On the other hand, learned AR appearing for the Revenue reiterates the findings recorded in the impugned order.

4. Heard both sides and perused the case records.

5. We have examined the sample copy of the agreement entered into between the appellant and their buyer. The agreement has specifically mentioned that the terms of sale is on FOR basis. The invoices issued by the appellants to their buyers have also stated that the sales are on FOR basis. Since the ownership/title of the goods were passed on at the buyer’s premises, the definition provided under Rule 2(l) squarely applies to the case of the appellants, inasmuch as the “place of removal” is the buyer’s premises. Further, we also find that the Explanation (c) of Section 4(3) of the Act of 1944 has also specifically provided that excisable goods sold after their clearance from their factory should also be considered as place of removal. Since the appellants had availed/utilized the courier service for delivery of the excisable goods at the buyer’s premises, such service qualify to be considered as ‘input service’, for the purpose of availment of CENVAT Credit of service tax paid thereo