2024 (4) TMI 70 - AT - Service Tax

Recovery of ineligible input service credit along with interest and penalty - denial of credit on such invoices which were issued in the name of its agent during the period 2007-08 to 2011-12 - privity of contract - HELD THAT - There is no dispute that the Input Services were rendered by the service providers that and that these services were utilized by the appellant. There is also no dispute that the appellant had rendered its output services on which it paid appropriate service tax. The only dispute is that the invoices for input service were issued in the name of agent of the appellant and not on the appellant itself. It is also not in dispute that the appellant had paid for these services and there is no evidence that the agent had paid for the services. In view of above, there are no reason to hold that the services were not utilized by the appellant or that the appellant had not paid for the services. It is true that the input invoices should have been in the name of the appellant instead of being in the name of its agent but, in our view, the mere fact that they were issued in the name of the agent is not sufficient to deny the substantive benefit of CENVAT Credit to the appellant when the utilization of the services and payment for them by the appellant is not in doubt. The impugned order set aside - appeal allowed.

Summary

Issues involved:
The issue involved in this case is the denial of CENVAT credit to the appellant for invoices issued in the name of its agent instead of the appellant itself, under Rule 14 of the CENVAT Credit Rules, 2004, along with interest and penalty under section 78 of the Finance Act, 1944.

Summary of Judgment:

Issue 1: Denial of CENVAT credit based on invoices issued in the name of the agent:
The appellant, a company registered in Dubai, engaged an agent in India for procuring input services on its behalf. The dispute arose when some service providers issued invoices in the name of the agent instead of the appellant. The department sought to deny CENVAT credit availed on these invoices. The appellant contended that it was the service recipient, the agent acted under the principle of agency, and payments for the services were made by the appellant. The Tribunal noted that the services were utilized by the appellant, which had paid for them, despite the invoices being in the agent's name. The Tribunal held that the mere issuance of invoices in the agent's name did not warrant denying CENVAT credit when the appellant had utilized the services and made payments. Therefore, the impugned order was set aside, and the appeal was allowed.

This summary provides a detailed overview of the issues involved in the legal judgment, the arguments presented by both parties, and the Tribunal's decision on the denial of CENVAT credit based on invoices issued in the name of the agent.