Circular No. 457/23/99-CX
dated 20/5/1999

F.No. 201/09/99-CX.6

Government of India
Ministry of Finance, Department of Revenue,
Central Board of Revenue
 New Delhi

Subject : Central Excise - Dispensing with maintenance of records in a specific format prescribed by the Central Excise Department and acceptance of records maintained in the normal course by the factories paying Central Excise duly exceeding Rs. 5 crores from account - Regarding -

    I am directed to say that in Para 68 of the Budget Speech (1999-2000), the Finance Minister had announced that the factories paying more than 5 crores excise duty in a year will not be required to maintain their records in a specific format prescribed by the Excise Department. The records maintained in the normal course of their functioning would be accepted as adequate.

2. The Board has examined the matter in consultation with Directorate General of Inspection (Customs & Central Excise).

3. Clause (a) read with clause (c) of Sub-rule (4) of Rule 173G already provides that the Commissioner may direct, in respect of any assessee or class of assessees that all books of accounts concerning production, manufacture, storage, delivery or disposal of goods, including the materials received received for or consumed in the manufacture of excisable goods or other goods, the goods and materials in stock with him and duty determined and paid by him shall be deemed to be in proper form for the respective purpose. In other words, the private records of the assessee could be accepted as adequate if any obtain the requisite information.

4. It may be noted that initially the facility was extended only to the assessees working under Record-Based pattern of Control (RBC). With the simplification of procedures and emphasis on the voluntary tax compliance, this facility can be extended to other "class of assesses" working under SRP, namely, a factory paying more than Rs. 5 crores central excise duty in a year (each factory being an assessee under the Central Excise Rules) from account current.

5. Clause (b) of Sub-rule (4) of Rule 173G also provides that the Commissioners have power to exempt an assessee, by order in writing, from authentication by proper officer before the books of accounts maintained under clause (a) of this Sub-rule are brought into use. Since the present proposal relates to "class of assessees". The Commissioner may issue a general order specifically exempting such "class of assessees" (i.e. a factory paying more than Rs. 5 crores central excise duty from account current) from authentication.

6. In view of the above, and in exercise of powers conferred by Rule 233 of the Central Excise Rules, 1944, the Board has decided the following :-

1. a factory which is covered by Chapter VII-A of the Central Excise Rules, 1944 and has paid central excise duty exceeding Rs. 5 crores from the account current in the preceding financial year or whose payment of central excise duty from account current exceeds Rs. 5 Crores in the current financial year, may maintain his own books of accounts in lieu of statutory records. It is clarified that this excisable goods on which duty is levied under Section 3A of the Central Excise Act, 1944, hundred percent export-oriented undertakings, Software Technology Parks, Electronic Hardware Technology Parks and Free Trade Zones.

2. These accounts will be in lieu of the statutory records, They need not be in the specific format prescribed for the statutory records. They may also contain any other information, as deemed necessary by the assessees, for their accounting purposes. In other words, such records of an assessee may contain information of more than one statutory record. Entries in such records, however shall be made on daily basis unless specifically provided otherwise in any rule of supplementary instruction issued by the Board or the Commissioner. It is also clarified that under this scheme, the term "statutory records" do not include the Returns/Applications/Declaration prescribed under the Central Excise Rules.

3. This opinion shall be exercised by intimating the Commissioner of Central Excise in writing. The assessee will clearly indicate the private records which he is maintaining in lieu of each of the statutory records.

4. The Central Excise Officers will not authenticate the private records of the assessees before these records are brought into use. The assessees of the category specified in (1) above shall deemed to be specifically exempted by the Commissioner under clause(b) of Sub-rule (4) of Rule 173G.

5. Where an assessee maintains computerised records, he shall take out the printouts (hardcopy) at the end of the month and a serial number shall be marked on each page. The printouts shall be placed in a folder in continuous serial numbers and shall be bound in book form at the end of the month.

6. Such private records shall be preserved for a minimum period of 5 years (the year to which entries pertain, shall be excluded while calculating this period)

7. The copy of Personal Ledger Account, RG-23A part-I & Part-II and RG-23C Part-I & Part-II (portion relating to the relevant month) shall continue to be submitted along with self-assessed RT-12 return to the Department. It is further clarified that the Excise Control Code (ECC) number allotted to the asssessees will be remain the same.

8. These instructions shall come into effect from the 1st June, 1999. The assessees who intend to adapt their private records to the Central Excise requirements may continue to maintain the records in the statutory format for the time being. In any case maintenance of private records in the manner specified in this Circular is an option to the assessee.

7. The Commissioners are required to closely watch the new scheme and conduct a survey after a period fo 6 months from now to appraise the efficacy of this scheme. In case there are any suggestions in this regard, the same may be forwarded to the Board.

8. The Commissioners are also requested to issue a detailed trade notice immediately so that the scheme can be availed of by a factor specified in this Circular with effect from 1st June, 1999.

Sd/-
(P K Sinha)
Under Secretary (CX.6)