Circular No. 499/65/99-CX
dated 10/12/1999

F.No.201/22/99-CX.6
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

Subject : Central Excise - Electronic maintenance or generation of records, returns, invoices or other documents using computer - New rule 226A inserted in Central Excise Rules, 1944 - Regarding.

        I am directed to say that to encourage the use of Information Technology by every person dealing with the Central Excise Department, the Government has issued notification number 58/99-Central Excise (N.T.) dated 30.11.99 whereby a new rule 226A has been inserted in Central Excise Rules, 1944 providing that any person may electronically maintain or generate records, returns, invoices or other documents using computer. The main features of the new rule and the supplementary instructions of the Board are mentioned hereinafter:-

(1) Under the new rule,any person dealing with the Central Excise Department may electronically maintain records or generate returns, invoices or other documents, using computer, which he is required to maintain or generate, aas the case may be, under the provisions of the Central Excise Rules, 1944. No specific permission from the Central Excise Department is required for this purpose. Such person is also not required to give any intimation to the Deparment.

(2) The Range office, however, will record in "Scrutiny Register" or any other record indicating a person's profole, the fact that such person is electronically maintaining records or generating returns, invoices or other documents, using computer.

(3) The records can be kept on any electronic media, such as hard disk of computers, floppies, CDs or tapes and preserved.

(4) The records, returns and documents should be in electronically readable format. This also means that a person who uses computerized system to generate records/books of accounts, returns etc., must keep the electronic record, even when a hard copy is kept.

(5) The printouts (hard copies) of records and documents must be taken out at the end of each month and kept in bound folders, separately for each type of record, return, documents etc.

(6) The person should ensure that proper back-up records are also maintained and preserved so that in the event of destructions due to unavoidable accidents or natural causes, the information can be restored within reasonable period of time. All such records, returns, invoices and other documents (both electronic and hard copy, including back-ups) shall be preserved for a period of five years (counted from the first day of the financial year following the financial year to which a record, return, invoice or document pertain).

(7) It shall be incumbent upon a person (who maintains electronic records, returns, documents etc.) to produce, on demand, the relevant records, returns or documents, in hard copy and/or in electronically readable format, to the Central Excise Officers, or the Audit parties deputed by the Commissioner or the Comptroller and Auditor General of India. Such records, returns, invoices or other documents will be produced pertaining to such period (subject to the period of preservation) as may be requested including the daily entries in electronic format relating to the current month for which the printouts are not taken out.

(8) In case any person is found to be misusing this facility or not providing access to the information or if there are any other cogent reasons, the Assitant Commissioner or the Deputy Commissioner of Central Excise may, after recording such r4asons and after taking into consideration the explanation tendered by the person, regarding the discrepancies, if any, prohibit a person from electronically maintaining or generating any records, returns, invoices or other documents using computer and inform the immediate superior officer.

2.    Board's instructions contained in Circular Nos. 20/86-CX.6 dated 6.6.1986, 17/93-CX.6 dated 16.11.93 and any other instructions issued earlier, relating to computerization of records, stand withdrawn.

3.    The trade and the field formations may be informed.

4.    Receipt of this Circular may please be acknowledged.

5.    Hindi version will follow.

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