Invoice Errors Cannot Block CENVAT Credit If Receipt And Use of Goods Are Proven: CESTAT Bangalore

The Bangalore Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 24 March clarified that minor discrepancies in invoices cannot justify denial of CENVAT credit where the receipt and use of goods are duly established.

A Bench comprising Judicial Member Dr. D.M. Misra and Technical Member Pullela Nageswara Rao held that the denial of credit to Kavveri Telecom Products Ltd., the appellant, was unjustified, as it had produced sufficient documentary evidence demonstrating receipt, payment, and utilization of inputs. The Tribunal observed:

“Sufficient evidences have been placed by the appellant indicating payment, delivery, despatch… which clearly indicate that the quantity of inputs… had been received in the factory of the appellant and utilised… Therefore, denial of cenvat credit… cannot be justified.”

The case arose from an order denying a demand of CENVAT credit amounting to Rs. 1.31 crore, along with interest and penalty, on the allegation that Kavveri Telecom had availed credit based on an incorrect invoice. The Revenue contended that two invoices bearing the same number and date showed discrepancies and that certain records did not properly evidence receipt of goods.

Kavveri Telecom submitted that the discrepancy arose from a clerical error in the consignee's name, which was later corrected by the supplier. It argued that the goods were in fact received at the factory and supported this with multiple records, including inward registers, purchase orders, transport documents, bank payment records, supplier stock records, and ER-1 returns reflecting duty payment.

The Tribunal noted that, although the original and corrected invoices differed in minor details, the total value, duty paid, and transaction particulars remained unchanged. It further observed that documentary evidence, including transport records, stock registers, purchase orders, and a Chartered Accountant's certificate, clearly established the receipt and utilization of inputs.

Importantly, the Tribunal found that the Revenue failed to rebut the evidence submitted by the appellant demonstrating actual receipt and use of the goods.

Accordingly, the impugned order was set aside, and the appeals were allowed with consequential relief.

Appearance for the Appellant:  Mr. Akbar Basha, Chartered Accountant

Appearance for the Respondent: Mr. Maneesh Akhoury, Authorized Representative