2013 (11) TMI 768 - AT - Service Tax

Tribunal denies Service Tax credit based on lack of evidence and direct services

M/s. Friends & Friends Shipping Pvt. Limited Versus Commissioner of Central Excise & ST., Rajkot

M/s. Friends & Friends Shipping Pvt. Limited Versus Commissioner of Central Excise & ST., Rajkot - 2014 (35) S.T.R. 811 (Tri. - Ahmd.) Issues:1. Entitlement to Service Tax credit based on debit notes issued by a Custom House Agent (CHA).Analysis:The appeal in this case revolves around the issue of whether the appellant is entitled to Service Tax credit amounting to Rs. 28,20,610/- based on debit notes issued by M/s. Arvind V. Joshi & Company, a Custom House Agent (CHA), for the service tax paid by the CHA in relation to services provided by Kandla Port Trust and Kandla Dock Labour Board to the appellant.The appellant's advocate argued that the CHA acted on behalf of the appellant, and therefore, the appellant rightfully availed the credit. The advocate cited relevant case laws to support this argument. On the contrary, the Departmental representative contended that the CHA did not provide any service directly to the appellant, and the procedure followed amounted to merely transferring the service tax paid by the CHA to the appellant without any actual service being rendered.The Additional Commissioner (A.R.) highlighted several key points in the written submissions, emphasizing that the CHA did not provide any service directly to the appellant, and there was no evidence to prove that the CHA was acting as an agent of the appellant. The burden of proof regarding the payment of service tax and the admissibility of credit was also stressed upon.Upon hearing both sides and examining the case records, the Tribunal concluded that the appellant was not eligible for the Service Tax credit paid by the CHA to Kandla Dock Labour Board and Kandla Port Trust. The absence of evidence establishing the CHA as the appellant's agent and the lack of direct services availed from the said entities led to the rejection of the appeal. The Tribunal also noted a misstatement on the part of the appellant regarding the nature of services and payment of service tax, invoking the extended period for scrutiny.In summary, the Tribunal ruled against the appellant, emphasizing the importance of clear documentation, direct service availing, and adherence to the provisions of Service Tax Credit Rules and Cenvat Credit Rules. The judgment underscores the necessity for accurate reporting and proper substantiation of claims to avail tax credits lawfully.