The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench held that denial of credit alleging that invoices mention name of original importer is too technical and cannot be accepted.
The appellants, 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.
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 was of the view that the credit availed by the appellant on such invoices raised by M/s.KJF Logistics, as if they were the direct service provider, is not eligible for credit for the appellant. Show cause notice was issued to the appellant proposing to disallow the credit of an amount of Rs.10,69,590/- for the period from March 2012 to March 2015.
After due process of law, the original authority confirmed duty demand of Rs.5,81,389/- along with interest in respect of invoices which did not contain the name of the appellant as recipient of services and imposed penalty. Aggrieved by such order, the appellant filed appeal before the Commissioner (Appeals) which was rejected. The appellant approached the Tribunal and the matter was remanded by the Tribunal to the adjudicating authority to examine the transactions once again. Subsequent to the remand, the original authority in de novo adjudication again confirmed duty demand of Rs.5,81,389/- and imposed penalty. Against such order, the appellant filed appeal before the Commissioner (Appeals) who upheld the order passed by the original authority. Hence the appellant is once again before the Tribunal
A Coram consisting of Sulekha Beevi CS, Judicial Member observed 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. I find that denial of credit alleging that invoices mention the name of the original importer is too technical and cannot be accepted.”
M. Kannan, appeared for the Appellant and M. Ambe, Deputy Commissioner (AR) appeared for the Respondent.
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