Tuesday, July 5, 2016

Destruction of invoices in fire incident won't lead to denial of credit when all invoices recorded in ledger


a)   During the course of audit of the assessee’s record, audit officers observed that original invoices were not available. Assessee submitted that original invoices were lost/destroyed in an accident of fire.

b)  Therefore, department contended that Cenvat credit was availed in respect of non-existing invoices as assessee was not having original input invoices to be produced for verification. The Adjudicating authority demanded interest and imposed penalty. The assessee filed appeal before the Commissioner (Appeals) which was allowed. Aggrieved by the impugned order, revenue filed the instant appeal.

The CESTAT held as under:

1)   Even though invoices had been destroyed in fire, but if invoices had been recorded in the ledger and books of account of the assessee the Cenvat credit could not be denied.

2)  Assessee could not have recorded the invoices in the ledger unless physical invoices were available. Not only the invoice or ledger entry were there but the respondent might have paid invoice value to the service provider which could also be verified from the books of account. - COMMISSIONER OF SERVICE TAX, MUMBAI-I V. KAYCEE FINANCE SERVICES LTD. [2016] 70 taxmann.com 352 (Mumbai - CESTAT)

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