Opinion for availment of Cenvat Credit on invoices provided by CHA against service received for Export and Import.

[PRANAB PANDA]

Dear Sir,

We the manufacturer of Stainless Steel products are engaged in import of various inputs, raw materials and capital goods from abroad for manufacture of aforesaid products. We are also exporting our final products to various overseas countries. For executing the Import and export activities we engaged various service providers. In the process they are also availing the services from service provider engaged by them.

We have insisted the service providers to avail CENVAT Credit of the service tax charged by the sub-service providers engaged by them and issue service-reimbursement invoice by charging applicable service tax on us. As per the explanation (a)(iii) to section 67 of Finance Act,1994,we feel there is no issue for availing CENVAT Credit on such reimbursement claims by the service providers i.e. M/s DHL Logistics in the instant case.

In addition to the above, we have received some of the invoices issued by the Shipping Liner on M/s DHL Logistics for detention charges of the export containers. The said invoices of shipping liners are on M/s DHL i.e. the CHA Service providers, but the payment has been directly made by us to shipping liner.

Our specific query is about the legal position for availing CENVAT Credit by us as the manufacturer on the following factual position and your valued guidance in this regard.

1. Invoice of Shipper Liner raised on M/s DHL, instead of us.

1. Invoice of shipper liner is containing the reference of Bill of Lading number against which the export was made. Therefore, having nexus of the service provided by Shipper Liner Company for the export of transaction of us.

1. Payment to Shipper Liner Company i.e. the service provider has been made directly by us against the invoices issued on M/s DHL.

1. Invoice of Shipper Liner Company for the liner service was on M/s DHL and the same modality has been followed for the above mentioned invoice for detention service also.

1. Payment for the liner service was routed through M/s DHL, but payment for detention services has been made directly by us.

Your valued opinions are solicited for deciding on availing CENVAT Credit on the invoices of Shipper Liner Company.

AI Summary

Cenvat credit admissibility affirmed where service tax is paid and service is used in relation to manufacture, despite invoicing lapses.
Cenvat credit is admissible where service tax was paid and the service was used in or in relation to manufacture, even if invoices are addressed to the CHA; substantive entitlement survives procedural lapses. Maintain evidence of payment and nexus to production, seek corrective invoicing or invoice endorsements showing the manufacturer "on account," and notify the jurisdictional range officer with documentation to mitigate interest and penalty risks.