2022 (9) TMI 429 - AT - Central Excise

CENVAT Credit - denial of credit on 35 invoices is that the services were not provided by M/s.KJF Logistics, Chennai - services outsourced to third parties - mismatch of names in the invoices - time limitation - HELD THAT - It is brought out from the facts that M/s.KJF Logistics, who was the CHA acting on behalf of the appellant for import and clearance of goods, had outsourced certain services in the nature of steamer agent service, CFS service, De-stuffing service etc. to other persons. They had collected charges in the nature of steamer agent charges, CFS charges, De-stuffing charges, survey charges. The third parties to whom the services were outsourced by M/s.KJF Logistics had raised the invoices in the name of M/s.KJF Logistics, Chennai and not in the name of the appellant. Though the services were provided to the appellant the invoices were raised in the name of KJF Logistics. 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. 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 that 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, the credit cannot be denied at the service recipient s end. The credit availed on 19 invoices has been denied alleging that name in the invoices show the name of M/s. M/s.Mitsubishi Corporation India Pvt. Ltd. and not that of the appellant - 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 - denial of credit alleging that invoices mention the name of the original importer is too technical and cannot be accepted. Time Limitation - HELD THAT - There is no positive evidence put forward by the department to show that the appellant had intentionally done some act to avail wrong credit. All the issues required interpretation of provisions of law with regard to availment of credit and there is no ulterior motive or overt act established by the department to show that appellant has done some fraud or suppressed facts so as to evade payment of duty. The department was given intimation with regard to import of goods and they have also filed E.R.1 returns disclosing credit availed by them. On such score, a very vague allegation that the appellant has suppressed facts with intention to evade payment of duty cannot be the basis for invoking extended period - the demand is time-barred. Appellant succeeds on the ground of limitation also. Appeal allowed.

Summary

Issues:
1. Eligibility of cenvat credit on invoices raised by M/s.KJF Logistics for services outsourced to third parties.
2. Denial of credit due to discrepancies in invoicing details.
3. Disallowance of credit on invoices mentioning a different entity as the recipient.
4. Grounds for invoking the extended period for demand.

Analysis:

Issue 1:
The case involved a dispute over the eligibility of cenvat credit availed by the appellant based on invoices raised by M/s.KJF Logistics for services outsourced to third parties. The department contended that since the services were not directly provided by M/s.KJF Logistics, the appellant was not entitled to the credit. However, the appellant argued that they had engaged M/s.KJF Logistics as their Custom House Agent for various services related to import of raw materials. The Tribunal held that the appellant, as the actual recipient of the services, was eligible for credit, especially considering that the appellant had paid the service tax on the charges collected by M/s.KJF Logistics. The Tribunal cited a relevant case to support this position, emphasizing that when services are availed on behalf of the assessee, credit cannot be denied.

Issue 2:
Regarding the denial of credit due to discrepancies in invoicing details, the appellant faced challenges with 10 invoices where the address of the Head office was mentioned instead of the factory address. The department disputed the credit based on this discrepancy. However, the Tribunal reiterated that as long as there was no dispute regarding the services availed and tax paid, the credit could not be denied solely based on the invoicing details.

Issue 3:
The appellant also encountered credit disallowance on 19 invoices where the name of a different entity, M/s.Mitsubishi Corporation India Pvt. Ltd., was mentioned instead of the appellant's name. The appellant clarified that they had purchased the goods on High Sea Sales basis from M/s.Mitsubishi Corporation India Pvt. Ltd., and services were provided to them post-purchase. Despite the discrepancy in the invoicing, the Tribunal ruled in favor of the appellant, emphasizing that the denial of credit based on the name mentioned in the invoices was too technical and not acceptable.

Issue 4:
Lastly, the appellant raised the issue of limitation, arguing that they had provided all necessary details to the department, including filing returns and intimating about import activities. The Tribunal found no evidence of intentional wrongdoing or fraud by the appellant to evade duty payment. Therefore, the demand was deemed time-barred, and the appellant succeeded on the ground of limitation.

In conclusion, the Tribunal set aside the impugned order, ruling in favor of the appellant on both merit and limitation grounds. The appeal was allowed, granting the appellant consequential relief as per law.