cenvat credit on computer generated invoice

[Kadayam Ganapathy Subramanian]

Dear Sirs,

The invoices issued by the certain service providers carry a remark,'computer generated invoice - no signature required”. But the audit party has raised objections that the invoices are invalid as they are not signed and so no credit can be taken.

Suggest solution to come out of the above audit objection.

Regards,

K.G Subramanian

subramaniankg at the rate of microlabs.in

 

[PAWAN KUMAR]

Please clarify whether there are some digital signatures on such invoices or not ?.

[Kadayam Ganapathy Subramanian]

Dear Sirs,

No digital signature is made on such invoices and only the above remark is mentioned on the same.

Regards,

K.G Subramanian

e.mail ID: subramaniankg at the rate of microlabs.in

[YAGAY andSUN]

Dear K.G. Subramanian,

The law is very specific and clear on this aspect that no excisable goods shall be removed from a factory or a warehouse except under any invoice signed by the owner of the factory or his authorized agent. Rule 11(1) of the Central Excise Rules, 2002.

However, you may submit documentary evidence that goods were duly received in your factory premises and the vendor had deposited the duty well within prescribed time limit.

Regards

Team YAGAY & SUN

(Management & Tax Consultants)

[Kadayam Ganapathy Subramanian]

Dear Sirs,

1.Find herewith stay order passed by CESTAT, Ahmedabad bench in this regard:

Cenvat Credit : Credit cannot, prima facie, be allowed on unsigned invoices especially when there is no correspondence or certificate from supplier/service provider that said invoices were issued by them
■■■

CESTAT, AHMEDABAD BENCH
Dewshree Network (P.) Ltd. Versus Commissioner of Central Excise & Service Tax, Surat*

M.V. RAVINDRAN AND H.K. THAKUR, JJ.

APPEAL NOS. ST/10063-10064 OF 2013 ORDER NOS. M/15713-15714 OF 2013 DECEMBER 2, 2013

Rule 9 of the Cenvat Credit Rules, 2004, read with rules 4A and 4B of the Service Tax Rules, 1994 and rule 11 of the Central Excise Rules, 2002 - CENVAT Credit - Documents on which credit may be taken - Stay Order - Assessee, a multichanneloperator, took credit of services received from satellite channels like Star, Zee etc. - Department denied credit on ground that assessee took credit on computer generated invoices, which were not signed by service provider as required under Service Tax Rules, 1994 and such unsigned invoices could be misused - Assessee argued that : (a) invoices were computerized invoices and indicated that signature was not required; and (b) services were obtained from reputed service providers and there was no dispute as to receipt and consumption of services - Department argued that service providers had not issued any certificates nor any correspondence was available to come to a conclusion that such service providers had, in fact, issued these invoices to assessee - HELD : Arguments made by parties can be considered only at time of final disposal of appeal - Assessee had not made out a complete prima facie case and was directed to make pre-deposit in part [Para 5] [Partly in favour of assessee]

CASES REFERRED TO
Electrotherm (India) Ltd. v. CCE [F.O. No. A/1774/WZB/AHD./2011, dated 4-10-2011] (para 2), Missionpharma Logistices (I.) (P.) Ltd. v. CCE [F.O. No. A/243/2012, dated 17-1-2012] (para 2) and Biswanath Prasad & Sons Agencies v. CC&CE 2005 (187) ELT 81 (Trib. - Delhi) (para 2).

Anand Mishra for the Appellant.

K. Shiv Kumar for the Respondent.

JUDGMENT

M.V. Ravindaran, J. -

These two stay petitions are filed for the waiver of pre-deposit of the amount confirmed as ineligible cenvat credit, interest thereof and equivalent amount of penalties.The adjudicating authority has confirmed the demand as ineligible cenvat credit, on the ground that appellant had availed cenvat credit on the computer generated invoices issued by the service provider, which are not in accordance with the provisions of Rule 9 of the Cenvat Credit Rules, 2004.
2. Learned counsel would draw our attention to the order in original and the show cause notice
issued. He would submit that the invoices which are issued by the service providers are computerised invoices which indicate that these are computerised invoices and no signatures are required. It is his submission that there is no dispute as to the receipt and consumption of the services as the appellant herein is multi-channel operator, who procures services from satellite channels like Star, Zee etc. and distribute the programmes to various cable operators. He would submit that they have enough evidence to show that they have paid the amount invoiced by the channels which would indicate the payment of service tax. He would also rely upon the following case laws: -

a) Electrotherm (India) Ltd. v. CCE [F.O. No. A/1774/WZB/AHD./2011, dated 4-10- 2011]
(b) Missionpharma Logistices (I) (P.) Ltd. v. CCE [F.O. No. A/243/2012, dated 17-1-2012]
(c) Biswanath Prasad & Sons Agencies v. CC&CE 2005 (187) ELT 81 (Trib. - Delhi).

3. Learned departmental representative on the other hand would submit that the Provisions of
Rule 2 of Service Tax Rules, 1994 were amended on 10.09.2004 to bring on statute that invoices or bills which need to be issued by service provider should be signed by the authorised person of the service provider. It is his submission that the findings of the adjudicating authority that unsigned copies can be misused, needs to be considered in a broader view.
4. On careful consideration of the submissions made by both sides and perusal of the records, we find that the provisions of Service Tax Rules, 1994 read with Cenvat Credit Rules, 2004 needs to be appreciated for coming to a conclusion as to whether the appellant herein is eligible for availment of cenvat credit on the unsigned computerised invoices of the service providers. It is also on record that service providers have not issued any certificates nor any correspondence is available to come to a conclusion that such service providers have, in fact, issued these invoices to the appellant.
5. In the absence of any such document, the arguments made by the learned counsel needs to be tested against the findings recorded by the adjudicating authority which, in our view can be done only at the time of final disposal of appeal. Prima facie, we are of the view that appellant has not made out a case for complete waiver of pre-deposit of the amounts involved. Accordingly, in order or hear and dispose the appeal on merits, we direct the appellant to deposit an amount of Rs. 20,00,000/- (Rupees twenty lakhs only) within a period of eight weeks from today and report compliance on 03.02.2014 before Deputy Registrar. Deputy Registrar after noting such compliance shall place the file before the bench for appropriate orders on 10.02.2014. Subject to such compliance being reported, the application for the waiver of pre-deposit of balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal.

Kindly enlighten your views on the above stay order.

Regards,

K.G Subramanian

Email ID: subramaniankg at the rate of microlabs.in

AI Summary

Unsigned computerised invoices: cenvat credit questioned where supplier authentication and corroborative proof are absent. Availability of cenvat credit on unsigned computerised invoices is doubtful where supplier confirmation or corroborative correspondence is absent. The Service Tax Rules and Cenvat Credit Rules require invoices to meet formal requisites; unsigned computerized invoices may be susceptible to misuse and, without documentary evidence of issuance, payment and receipt of services, an assessee may fail the prima facie test for credit entitlement, leading to procedural safeguards such as directed pre deposit pending final adjudication.