Service Tax
TRT-2025-
Cestat Chennai
Date:-08-09-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 08 September 2022
Facts –
- The Appellant, M/s. Karaikal Chlorates, are engaged in manufacture of Potassium Chlorate falling under Chapter 28 of CETA, 1985.
- On verification of invoices on which the appellant has availed input services credit, it was seen that they have availed credit on bills/invoices raised by M/s.KJF Logistics, Chennai under various categories.
- It was noticed by the department that the services mentioned in these invoices were not rendered by M/s.KJF Logistics, Chennai but outsourced to the third parties who had rendered the services directly to the appellant.
- Such third parties who rendered services were M/s. Maersk Line India Pvt. Ltd., M/s. Gateway Distriparks South Pvt. Ltd. M/s. Overseas Enterprises etc. and the invoices were issued by M/s.KJF Logistics based on which the appellant had availed cenvat credit.
- M/s.KJF Logistics, who was the direct receiver of the services, had enclosed third party bills addressed to M/s.KJF Logistics and sent to the appellant only for reimbursement purposes.
- The Department has taken the view that since the services were outsourced, M/s.KJF Logistics is the service recipient and therefore the credit is not eligible to the appellant.
- The original authority in de novo adjudication again confirmed duty demand of Rs.5,81,389/- and imposed penalty, which was upheld.
- Hence the appellant is once again before the Tribunal.
Issue –
- Whether the credit was availed by the appellant which they were not eligible for?
Order –
- The Tribunal observed that on perusal of the invoices, it can be seen that the appellant has paid the service tax on such charges as collected by M/s.KJF Logistics. It is also established by the letter issued by KJF Logistics that they have not availed credit on the service tax mentioned in the invoices issued by third parties. On such score, the department cannot deny the credit alleging that invoices were raised in the name of CHA, M/s.KJF Logistics and those services were not provided to the appellant. There is no dispute with regard to service availed by the appellant and service tax paid by them, hence the credit cannot be denied at the service recipient’s end.
- As for the issue relating to the credit availed on 19 invoices has been denied alleging that name in the invoices show the name of M/s. Mitsubishi Corporation India Pvt. Ltd. and not that of the appellant, the Tribunal held that the original importer had engaged various service providers for import of the goods and clearance of the goods. After purchase of the goods by the appellant, these services providers had provided services to the appellant for clearances of the goods. However, the invoices were issued in the name of original importer M/s. Mitsubishi Corporation India Pvt. Ltd. It is clear from the records that the appellant had paid service tax for the services availed. Therefore, denial of credit alleging that invoices mention the name of the original importer is too technical and cannot be accepted.
- In respect to the issue of 10 invoices the credit which was denied alleging that name and address of the Head office of the appellant-company has been mentioned instead of the name and address of their factory into which the raw materials were received. Tribunal held that the service provider had issued the invoices to the appellant’s registered office at Madurai instead of factory address of Karaikal. Once again it has to be reiterated that when there is no dispute with regard to the services availed and the tax paid by the assessee, the credit cannot be denied alleging that invoices are raised in the name of the Head office.
- Appeal allowed.
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