Case Law Details
Khushi Enterprise Vs C.C.E. & S.T.-Daman (CESTAT Ahmedabad)
Introduction: The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad in the recent case of Khushi Enterprise Vs C.C.E. & S.T.-Daman has delivered a noteworthy judgment. The Tribunal ruled that a service tax refund could not be denied merely because the invoice was raised to an agent, affirming it to be as valid as an invoice raised to the principal. The Tribunal also asserted that pre-shipment inspection qualifies as an input service, making it eligible for a service tax refund.
Analysis: This case revolves around two significant issues – the validity of service tax payment invoices raised to a Clearing and Forwarding Agent (CHA) instead of the principal, and whether pre-shipment inspection can be classified as an input service. The appellant contended that the invoices, even though issued to the CHA, bore their name, establishing a clear correlation between the service, the service provider, and the service recipient.
Furthermore, they argued that pre-shipment inspection, which was conducted solely for the export goods, should be considered an eligible service for refund. The Tribunal concurred with the appellant, referring to multiple precedents to strengthen its judgement.
In addition, the Tribunal concluded that the CHA, acting as the authorized person of the appellant, was effectively providing services on behalf of the appellant. Therefore, even though the invoice was issued in the name of the CHA, the service was acknowledged as received by the appellant. The Tribunal also pointed out that pre-shipment inspection is crucial for the export of goods and thus should be regarded as an input service.
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