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The issue of up to what stage a manufacturer can take credit on the service tax paid on goods transport by road is a subject matter of litigation in various decisions. That is, whether Cenvat Credit can be claimed with respect to service tax paid on the transportation of goods upto the factory gate or upto depot, upto the premises of the consignment agent or upto the place of delivery i.e., premises of the customer?
In this regard, in a recent decision, the Customs Excise & Service Tax Appellate Tribunal has held that, where the duty is chargeable at specific rates or at the value determined under Section 4A and not at ad-valorem rates under Section 4, the definition of ‘place of removal’ as given in Section 4(3)(c) of the Central Excise Act, 1944 would not be applicable and as such the ‘place of removal’ will be the factory gate. Therefore, in such cases, Cenvat Credit cannot be availed with respect to service tax paid on transportation of final products beyond the factory gate.