Whether the denial of CENVAT Credit by the Adjudicating Authority for the reason that invoices of input service bear handwritten serial number is correct or not?

PJ/Case Law/2020-2021/3601

Krupa Trading Company V/s C.C.E. & S.T.-Valsad (Excise Appeal No. 11070 of 2015)
Issue: Whether the denial of CENVAT Credit by the Adjudicating Authority for the reason that invoices of input service bear handwritten serial number is correct or not?
Department Contention: They contended that appellant is not allowed to Input Tax Credit as the supplier’s Invoice number bears handwritten serial number. Invoice is a valid document to avail Input Tax Credit as per rule 4(A) of Service Tax Rules, 1994 and erstwhile rule 52(A)(6) of Central Excise Rules, 1944 and Rules 11 of the Central Excise Rules, 2002.
Tribunal held that: On careful reading of the impugned order, we find that the entire finding is on the basis of interpretation of Rule 11 of Central Excise Rules, 2002, Rule 9 of the CENVAT Credit Rules, 2004, Rule 4(A) of Service Tax Rules, 1994, chapter 4 of Central Excise minor (CPEC/ and Supplementary Instructions), rule 4(A) of Service Tax Rules, 1994 and erstwhile rule 52(A)(6) of Central Excise Rules, 1944.
And as per Rule 4 A(1) of the Service Tax Rules 1994, Taxable service to be provided or credit to be distributed on invoice, bill or challan.- (1) Every person providing table service shall issue, not later than fourteen days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier, an invoice, a bill or, as the case may be, a challan signed by such person or a person authorized by him in respect of such taxable service provided or to be provided and such invoice, bill or as the case may be, challan shall be serially numbered and shall contain the following, namely

The name, address and the registration number of such person
The name and address of the person receiving taxable service
Description classification and value of taxable service provided or to be provided and
The service tax payable thereon.

However, in the above rule, there is no condition that Invoice should bear pre-printed serial numbers. And law is clear that Invoice should contain Serial Number and may or may not be pre-printed.
Therefore, the Learned Commissioners finding that the invoice should bear Pre-Printed Serial Numbers is not flowing from the above cited provision. And regarding 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. We also observed that at the time of audit whereby the same objection was raised a report was sought from the service provider’s end and it was found that the service tax was paid. We also observed there is no dispute as regard genuineness of the invoices and payment of service tax against said invoices. However, the Learned Commissioner even after considering the aforesaid factual position proceeded to disallow the credit solely on the ground that the invoices do not bear the Pre-printed Serial Number.
Conclusion: The Tribunal found that in the appellant’s own earlier case a show cause notice F.no. V(CH.70) 3-31/DEM/10-11 dated 30/05/2011 was issued on the same issue that whether the appellant is entitled for Cenvat Credit on the invoice issued by the service provider which bears handwritten serial number. That case was travelled up to this Tribunal in appeal no. E/11069/2015. This Tribunal vide order no. A/10424/2019 dated 07/02/2019 decided the matter in appellant’s favour.
The reason for denial of the Cenvat Credit in the above decision of the Tribunal and in the present case is absolutely identical. Since the issue in the appellant’s own case has already been decided vide order dated 07/02/2020. Accordingly, following the decision of this bench in above cited order, the appeal was allowed.
The contention of petitioner was accepted and ruled that if payment of Service Tax was paid on the receipt of Services and invoice contains particulars as per Rule 4 A(1) of the Service Tax Rules 1994, then CENVAT Credit will be allowed whether invoice serial number was preprinted or handwritten.
Prepared by- CA Tarun Rankawat

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PJ/Case Law/2020-2021/3601

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