CESTAT Allows ₹1.31 Crore CENVAT Credit, Says Invoice Errors Cannot Override Substantive Evidence

March 24, 2026 : The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that minor discrepancies in invoices cannot be used to deny CENVAT credit when the assessee is able to establish receipt and utilisation of inputs through cogent documentary evidence.

In a detailed order dated 24 March 2026, the Tribunal allowed the appeals filed by Kavveri Telecom Products Ltd. and its officials, setting aside a demand of ₹1.31 crore along with interest and penalties.

Background of the Dispute

The dispute arose from CENVAT credit availed on a single invoice (No. 16 dated 30.09.2009) issued by M/s. Nextgen Electronics Pvt. Ltd. for supply of “RF Kit.” The Department denied the credit citing discrepancies, including incorrect consignee details and variations between two invoices bearing the same number and date.

The adjudicating authority had confirmed recovery of ₹1,31,84,000/- along with interest and penalties, also imposing penalties on company officials under the Central Excise Rules, 2002.

Appellant’s Case

Kavveri Telecom Products Ltd. contended that the discrepancy in the invoice arose due to an inadvertent error where the consignee was mentioned as “Kavveri Telecom Infrastructure Limited” instead of the appellant. A corrected invoice was subsequently issued, though it contained a minor omission of one line item.

To substantiate its claim, the appellant produced extensive documentary evidence, including:

• Purchase orders and ERP records
• Inward and stock registers maintained at the factory
• Transport documents and proof of freight payments
• Ledger accounts reflecting payments to the supplier
• Supplier’s stock records and ER-1 returns showing duty-paid clearance
• Chartered Accountant certificate confirming receipt, utilisation, and balance of inputs

The appellant also clarified that discrepancies in internal registers arose due to differences between factory-level records and head office documentation systems.

Tribunal’s Findings

The Bench comprising Dr. D.M. Misra (Judicial Member) and Pullela Nageswara Rao (Technical Member) observed that:

• Both invoices bore the same number and date, and despite variations in description or number of items, the total value and duty paid remained unchanged
• The appellant had produced consistent and corroborative evidence demonstrating purchase, transportation, receipt, and utilisation of inputs
• The supplier had duly recorded clearance of goods in statutory records and paid applicable duty

Importantly, the Tribunal noted that the Revenue failed to rebut the documentary evidence placed on record.

The Bench held that:

“Sufficient evidences… 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.”

Key Legal Principle

Reinforcing settled jurisprudence, the Tribunal held that substantive compliance prevails over procedural lapses, and CENVAT credit cannot be denied solely on the basis of minor invoice discrepancies when the core conditions—receipt, duty payment, and utilisation—are fulfilled under the CENVAT Credit Rules, 2004.

Outcome

The Tribunal set aside the impugned order and allowed all appeals with consequential relief.

Case Title: Kavveri Telecom Products Ltd. & Ors. v. Commissioner of Central Excise, Bangalore
Case Nos.: Central Excise Appeal Nos. 22044, 22045 & 22046 of 2015
Decision Date: 24 March 2026