F.No.212/03/94-CX.6 (Pt.)

Subject : Central Excise - Admissibility of modvat credit where computer generated invoices do not contain pre-printed serial numbers - Instructions regarding.

     It has been brought to the notice of the Board that few commissionerates have issued trade notices making pre-printing of serial numbers on the invoices generated on computers mandatory, whereas in rest of the commissionerates such pre-printing of serial numbers is not mandatory. This has resulted into diverse practice. Further, the commissionerates where pre-printing of serial numbers on computer generated invoices is mandatory are issuing show-cause notices for denial of modvat credit in respect of the goods received from the commissionerates where such pre-printing is not mandatory, on the ground that invoices do not contain pre-printed serial numbers.

2. The Board has examined the matter. The present rule 52A and rule 57GG of Central Excise Rules, 1944 provide that each invoice shall bear a printed serial number running for the whole financial year beginning on the 1st April of each year. Based on this, Circular No. 34/34/94-CX dated 26.4.94 was issued, wherein it was clarified that in case of invoices generated on computers, the  running serial numbers can be printed at the time of printing of such invoices. In an another Circular No. 180/14/96-CX dated 7.3.96, it was clarified that printing of running serial numbers of invoices with the help of automatic number machine (franking machine) is permitted provided the serial numbers are given on each invoice book before the same is brought into use and that hand written or rubber stamped serial numbers are not permitted. The latter instructions re-emphasized that it may may not be necessary to pre-print serial numbers on computer generated invoices. However, few commissionerates noticed misuse of this provision and recommended its revision. The matter is already under detailed examination and the decision will be communicated in generated invoices do not amount to any breach of rules, Denial of modvat credit, merely on the aforesaid ground is not warranted, especially when this procedural lapse has happened consequent to diversity in procedures among the different Commissionerates.

3. Accordingly, the Board has decided that modvat credit should not be denied on the ground that the computerised stationery did not contain "pre-printed serial numbers" but only contained serial numbers printed by the computer at the time of printing of invoices. Henceforth, show-cause notices for denial of modvat credit should not be issued on this ground, and the show cause notices already issued should be disposed of on the basis of the aforesaid instruction.