Assessee Can't Claim ITC For Transportation If Costs Aren't Included In Assessable Value Of Goods For Payment Of Central Excise Duty: Kerala HC

The Kerala High Court ruled that an assessee cannot claim input tax credit (ITC) for transportation services if the transportation costs are not included in the assessable value of goods for the payment of central excise duty. The case involved a manufacturer who excluded freight and insurance charges from the assessable value, arguing that the sale was completed at the buyer’s premises. The court held that since the transportation costs were not included in the assessable value, the assessee was not entitled to ITC for those services. The judgment emphasized the importance of including all relevant costs in the assessable value to claim ITC and reinforced the principles governing the CENVAT Credit Rules. This ruling aims to prevent misuse of tax credits and ensure compliance with tax regulations.