2023 (3) TMI 13 - AT - Service Tax

Denial of CENVAT Credit - duty paying documents - denial on the ground that some of the invoices were without signature and conditions under Rule 4A of the Service Tax Rules, 1994 were not fulfilled in certain cases - refund of link advance, which the appellant has claimed as a refundable deposit - demand alongwith penalty - HELD THAT - The appellant had claimed CENVAT Credit to the extent of Rs.34,31,074/-, but however, the lower authority has allowed input Service Tax credit to the extent of Rs.4,56,032/-. It is observed that certain invoices were computer generated, which did not have the signature. We find that various Benches of the CESTAT have taken a consistent view that in respect of computer generated invoices, signature was not required and consequently, have directed the authorities not to deny the input Service Tax credit in M/S MAMMON CONCAST PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX, CUSTOMS CENTRAL EXCISE - ALWAR (RAJASTHAN) 2021 (6) TMI 619 - CESTAT NEW DELHI - the input Service Tax credit should not be denied merely because the invoices are computer generated, which did not have signatures. Consequently, to this extent, the impugned order is set aside and this ground of the appeal stands allowed. Denial of input Service Tax credit on the allegations of non-fulfilment of the conditions in Rule 4A of the Service Tax Rules, 1994 - HELD THAT - The Adjudicating Authority has, in the impugned Order-in-Original, clearly brought out on record that some of the invoices had different names altogether, which did not even contain the name of the appellant and when the same was brought to the notice of the appellant, the appellant did not explain; and that in respect of certain other invoices, the same were issued on 03.04.2011 for the services provided during September 2009 to June 2010. In respect of some of the invoices, the Adjudicating Authority has observed that the same were computer generated, which did not contain any signature/s and that some of the invoices were photocopies - the input Service Tax credit cannot be denied just because computer generated invoices or photocopies of invoices were produced. Mismatch of name, date, etc. - HELD THAT - There are no infirmity in denying the input Service Tax credit since, clearly, the appellant has not bothered to produce appropriate invoices. Hence, no interference is called for and consequently, this ground of the appeal is partly allowed. Link advance, which the appellant has claimed as a refundable deposit - HELD THAT - Even before this forum, appellant have not made any efforts to place on record any supporting documents like, agreement, contract, etc., to buttress their arguments. Hence, we do not feel it proper to interfere with the findings of the lower authority and consequently, this ground of the appeal stands dismissed. Penalty levied under Section 78 of the Finance Act, 1994 - HELD THAT - The appellant had entertained a bona fide doubt as to the Service Tax liability and there is also no finding that the appellant had intentionally evaded the payment of Service Tax. Moreover, from the facts which have been brought on record, there is no scope for any fraud or intent to evade the payment of Service Tax. Hence, it is deemed proper to delete the penalty levied under Section 78 ibid. by invoking the provisions of Section 80 ibid. and accordingly, the impugned order to this extent is set aside and this ground of the appeal stands allowed. Appeal disposed off.

Summary

Issues:
1. Denial of CENVAT Credit for invoices without signature and non-fulfillment of Rule 4A conditions.
2. Correctness of Service Tax demand on link advance received.
3. Correctness of penalty levied under Section 78 of the Finance Act 1994.

Analysis:
1. The appellant contested the denial of CENVAT Credit amounting to Rs.34,31,074, reduced to Rs.4,56,032 by the Adjudicating Authority. The appellant argued that the denial was based on clerical mistakes in some invoices, which were curable. The Tribunal noted that computer-generated invoices without signatures were valid for claiming credit, citing precedents. Consequently, the denial based on lack of signatures was set aside, allowing the appeal on this ground.

2. Regarding the demand of Service Tax on the link advance received, the appellant claimed it was a refundable deposit for cable services. However, the appellant failed to provide supporting documents to substantiate this claim. The Tribunal upheld the lower authority's decision, dismissing the appeal on this issue.

3. The penalty under Section 78 of the Finance Act 1994 was contested by the appellant, arguing a bona fide doubt regarding the Service Tax liability and the absence of intentional evasion. The Tribunal found no evidence of fraud or intent to evade tax, leading to the deletion of the penalty under Section 78. The appeal was allowed on this ground.

In conclusion, the Tribunal ruled in favor of the appellant on the denial of CENVAT Credit due to invoices without signatures, dismissed the appeal on the Service Tax demand for the link advance, and allowed the appeal by deleting the penalty levied under Section 78 of the Finance Act 1994. The appeal was disposed of accordingly on 27.02.2023.