2020 (2) TMI 293 - AT - Central Excise

CENVAT credit - duty paying invoices - denial of credit on the ground that the invoices in respect of input services on which Cenvat Credit was availed, are bearing hand written numbers and in some of the invoices either Registration Number was not mentioned or the registration number was over written - HELD THAT - The invoice should bear serial numbers, however, there is no mention in the rules that the invoice should bear Pre-printed Serial Numbers. Therefore, the invoice should be Serially Numbered irrespective, whether, it is hand written or Pre-printed. Therefore, the Learned Commissioners finding that the invoice should bear Pre-Printed Serial Numbers is not flowing - As regard non-mention of service tax registration or it is over written on the invoice the same is only procedural lapse, so long, there is no dispute regarding payment of service tax by the service provider. At the most, if the department has any doubt about the authenticity of the invoices due to the said discrepancies the department is free to carry out the verification of invoices at the service providers end to ensure that with reference to the invoices on which credit was availed, proper service tax was paid. The Learned Commissioner proceeded to disallow the credit solely on the ground that the invoices do not bear the Pre-printed Serial Number and the Registration Number is not mention in the invoice or it is over written - merely for the for the said discrepancies cenvat credit cannot be denied as held in catena of judgments, some of which cited by the Learned Counsel, so long it is not under dispute that the service tax was paid by the service provider. Since, Learned Commissioner has not given any finding on the submission of the appellant made in para (v) and (viii) of the impugned order, the matter needs to be re-considered only on the aspect that on the disputed invoices, the service providers have paid the service tax. Appeal allowed by way of remand.

Summary

Issues:
Appeal against disallowance of Cenvat Credit due to discrepancies in invoices.

Analysis:
The appeal challenged the Order-In-Original disallowing Cenvat Credit of ?1,96,89,042/- with interest and penalty due to discrepancies in invoices related to input services. The appellant argued that the service tax payment was not in dispute, and the minor discrepancies should not lead to credit disallowance. The appellant cited previous tribunal judgments supporting their case.

The tribunal analyzed the relevant rules, including Rule 4A(1) of the Service Tax Rules, 1994, and Rule 11 of the Central Excise Rules, 2002. It noted that the rules did not mandate pre-printed serial numbers on invoices, emphasizing that serial numbering was essential regardless of being handwritten or pre-printed. The tribunal highlighted that the absence of service tax registration or overwriting on invoices was a procedural lapse, not affecting the tax payment authenticity.

The tribunal referred to the appellant's submissions regarding audit verifications confirming service tax payments against the disputed invoices. Despite this, the Commissioner disallowed the credit solely based on the lack of pre-printed serial numbers and registration details on invoices. The tribunal emphasized that credit denial for such minor discrepancies was unwarranted, especially when service tax payment was verified.

Consequently, the tribunal set aside the impugned order and remanded the case to the adjudicating authority for a fresh decision, emphasizing the need to consider whether service tax was paid on the disputed invoices. The judgment highlighted the importance of verifying tax payments rather than focusing on minor discrepancies in invoices.

In conclusion, the tribunal's decision underscored the significance of ensuring tax compliance through verification processes rather than solely relying on invoice formalities. The case exemplified the need for a balanced approach in assessing Cenvat Credit eligibility based on substantive tax payment verifications rather than procedural irregularities in documentation.