Date : 24 / 02 /2010

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Dear Sir / Madam,

The documents required to be maintained by your Organisation, as per Central Excise

Rules, are as follows.

INPUTS / RAW MATERIALS

Input means all goods, except light diesel oil, high speed diesel oil and motor spirit,
commonly known as petrol, used in or in relation to the manufacture of final products
whether directly or indirectly and whether contained in the final product or not and includes
lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared
along with the final product, goods used as paint, or as packing material, or as fuel, or for
generation of electricity or steam used in or in relation to manufacture of final products or
for any other purpose, within the factory of production; (ii) all goods used for providing any
output service;

Explanation 1.- The light diesel oil, high speed diesel oil or motor spirit, commonly known
as petrol, shall not be treated as an input for any purpose whatsoever.

Explanation 2.- Input include goods used in the manufacture of capital goods which are
further used in the factory of the manufacturer;

The Government has not specified any statutory format of records/registers to be

maintained for monitoring the receipt and dispatch of inputs.

It is compulsory to maintain your Organisations private / internal records, based on

individual accounting requirements and the stipulations of any particular Government
Rules which may demand the maintenance of certain minimum data requirements.

Every assessee is statutorily required to furnish to the Range Officer, a list in duplicate, of
all the records prepared or maintained by him for accounting of receipt, purchase,
manufacture, storage, sales or delivery of the goods including inputs and capital goods.
Any modification in the list, is to be communicated to the Department as and when such
modification takes place.

Assessees paying Central Excise duty of Rs.1 Crore and above in PLA Account and
manufacturing the finished goods which find a place in Central Excise Tariff Heading
(CETH) nos. 22, 28 to 30, 32, 34, 38 to 40, 48, 54.02, 54.03, 55.01, 55.02, 55.03, 55.04,
72 to 74, 76, 84, 85, 87, 90 and 94 are required to submit information regarding their
Principal inputs, in form ER-5, to the Superintendent of Central Excise before the 30'th of
April in the relevant Financial year. In the case of any alterations in the Principal inputs, the
form ER-5 is to be submitted within 15 days, to the Superintendent of Central Excise. For
the purposes of this rule, “principal inputs”, means any input which is used in the
manufacture of final products and the cost of such input is > = 10% of the total cost of raw-
materials for the manufacture of a single unit quantity of the final product.

Self - authentication of the private records/registers is to be done by the assessee. The

first page and the last page of each such account book shall be duly authenticated by the
producer / manufacturer or his authorised agent (preferably before use). Though there is
no statutory requirement to maintain the records in book form, the self-authentication
procedure implies that the records cannot be kept in the computer or in loose-leaf form.

The private records mentioned in the list / relevant for Central Excise are to be necessarily
kept in the factory to which they belong.

All the above records should be preserved for a period of five years immediately after the
financial year to which such records pertain.

If an assessee has more than one factory, then the records should be maintained
separately for each of the factories.

Records shall mean all the records prepared or maintained by the assessee for accounting
of transactions in regard to receipt, purchase of the goods (i.e. inputs and capital goods).
All accounts, agreements, invoice, price-list, return, statement or any other source
document, whether in writing or in any other form shall be treated as records. Source
documents are those documents which form the basis of accounting of transactions and
include sales invoice, purchase invoice, journal voucher, delivery challan and debit or
credit note.

Non-maintenance of specified data / records (Private records or Statutorily specified) will

attract penal provisions and confiscation.

Overwriting / cutting out, of the entries, in the records, can lead to unnecessary litigation
(Hawkins Cookers Ltd. v. CCE 1997(12) ELT 255).

Additional records / data (specified in Rule 22 (sub rule 2) of CEX Rules), Income Tax
audit / cost audit reports can be called for by the Range Superintendent (authorised by
Audit party or Commissioner) at the time of inspection.

There is no explicit bar on entry of duty paid goods into the factory premises (especially in
the case of goods which are not identical to the goods being manufactured within the
factory premises), even if it was meant for trading. However, this should be indicated in the
Form A-1 i.e. application for Registration. The records for this are to be maintained
properly. But if the manufacturer, intends to trade in the non-identical goods and intends to
issue Cenvatable invoice, then a separate Dealer Registration must be obtained.

Inputs received under the ((Removal of Goods at Concessional Rate of Duty for
Manufacture of Excisable Goods – Rules) should be properly accounted for and used only
for the purpose intended, as per the permission given by the Excise authorities. The
details to be accounted for, at the time of receipt are – Consignor details, quantity and
value of the received goods, quantity consumed for intended purpose and quantity
remaining in stock. The details are to be accounted for invoice-wise.

The Range of the supplier, cannot insist on Re-warehousing Certificate, because there is
no provision in the Rules. Inputs received under this scheme can also be sent to another
eligible manufacturer (who should also be registered under this Scheme), following the
above procedure.

Defective goods can be returned back to original supplier (but duly re-accounted for, by
the original supplier in his non-duty paid stock)

PRODUCTION
Compulsory to maintain the “Daily Stock Account” (Rule 10 of CEX Rules). In the case of
100% EOU also it is mandatory to maintain a “Daily Stock Account". (Rule 17 of CEX
Rules & Notification No. 59/2001-C.Ex.(N.T.) dated 6th Aug' 01). [Chapter-6, Para 2.1 (vii)
of E.M ]

It is compulsory to maintain private records, based on individual accounting requirements

and the stipulations of any particular Government Rules which may demand the
maintenance of certain minimum data requirements.

Every assessee is statutorily required to furnish to the Range Officer, a list in duplicate, of
all the records prepared or maintained by him for accounting of manufacture, storage of
the goods. Any modification in the list, is to be communicated to the Department as and
when such modification takes place.

Self - authentication of the records is to be done. The first page and the last page of each
such account book shall be duly authenticated by the producer / manufacturer or his
authorised agent (preferably before use).

“Daily Stock Account’ (DSA) should be maintained, on a daily basis, in a legible manner
and should indicate the particulars regarding:
Description of the goods produced or manufactured
Opening balance
Quantity produced or manufactured
W-I-P / inventory of goods
Quantity removed
Assessable value
Amount of duty payable
Particulars regarding amount of duty actually paid.

Since the DSA record commences with the recording of details pertaining to produced /
manufactured goods, the entries in the DSA are to be made, as soon as the final
manufactured commodity steps off from the production line.

In the case of 100% EOU, it is necessary to account for production, description of goods,
quantity removed and the duty paid on a daily basis.

The private records mentioned in the list / relevant for Central Excise, are to be necessarily
kept in the factory to which they pertain
Records shall mean all the records prepared or maintained by the assessee for accounting
of transactions in regard to manufacture, storage of the goods (in process inputs, semi-
finished goods and finished). All accounts, agreements, invoice, price-list, return,
statement or any other source document ,whether in writing or in any other form shall be
treated as records. Source documents are those documents which form the basis of
accounting of transactions and include sales invoice , purchase invoice, journal voucher,
delivery challan and debit or credit note.

All the above records should be preserved for a period of five years immediately after the
financial year to which such records pertain.

If an assessee has more than one factory, then the records should be maintained
separately for each of the factories.

Non-maintenance of specified data / records (Private records or Statutorily specified) will

attract penal provisions. Overwriting / cutting out, of the entries, in the records (especially
DSA) can lead to unnecessary litigation (Hawkins Cookers Ltd. v. CCE 1997(12) ELT
255).

Additional records / data (specified in Rule 22 (sub rule 2) of CEX Rules), Income Tax
audit / cost audit reports can be called for by the Range Superintendent (authorised by
Audit party or Commissioner) at the time of inspection.

Large Taxpayer Units (LTU's) (paying duty of Rs.1 crore and above annually) are required
to file data online, every week, pertaining to Production, Clearance and Duty.

SALES
Every assessee is statutorily required to furnish to the Range Officer, a list in duplicate, of
all the records prepared or maintained by him for accounting of sales or delivery of goods
(including inputs and capital goods). Any modification in the list, is to be communicated to
the Department as and when such modification takes place.

Self - authentication of the records (shown in the list) is to be done. The first page and the
last page of each such account book shall be duly authenticated by the producer /
manufacturer or his authorised agent (preferably before use).

Records shall mean all the records prepared or maintained by the assessee for accounting
of transactions in regard to sales or delivery of the goods (including inputs and capital
goods). All accounts, agreements, invoice, price-list, return, statement or any other source
document ,whether in writing or in any other form shall be treated as records. Source
documents are those documents which form the basis of accounting of transactions and
include sales invoice , purchase invoice, journal voucher, delivery challan and debit or
credit note.

All the above records should be preserved for a period of five years immediately after the
financial year to which such records pertain.
If an assessee has more than one factory, then the records should be maintained
separately for each of the factories.

Non-maintenance of specified data / records (Private records or Statutorily specified) will

attract penal provisions. Overwriting / cutting out, of the entries, in the records (especially
DSA) can lead to unnecessary litigation (Hawkins Cookers Ltd. v. CCE 1997(12) ELT
255).

Additional records / data (specified in Rule 22 (sub rule 2) of CEX Rules), Income Tax
audit / cost audit reports can be called for by the Range Superintendent (authorised by
Audit party or Commissioner) at the time of inspection.

The current Central excise Rules do not speak about the concept of ‘store room’. Thus,
there is no restriction in storage of final products anywhere within the factory and this can
be stored in the place of manufacture without payment of duty, though these goods are
charged to Excise duty, on clearance.

There is also no time limit for removing the final products from the place of manufacture.

However, a system of clearly identifying / segregation of the raw materials, semi-finished

goods and finished goods available within the permitted premises, should be available in
order to correlate them with the items mentioned in the records / documents.

The manufactured / stored finished goods are accounted for, in the “Daily Stock Account”.

Removal / clearance of finished dutiable goods, is to be made only by using an invoice.

Invoice can be in book form or in loose leaf form (if computerised). The invoices should be
serially numbered beginning from April 1. The serial numbers should not be handwritten
but should either be pre-printed / automatically generated & printed by computer / franked
preferably. Two sets of invoices are allowed to be used at any given point of time i.e. one
for Home consumption and the other for Export. However, the serial numbers allotted to
the invoice sets meant for Home Consumption should be distinct from the serial numbers
allotted to the invoice sets meant for Exports. Additional sub-sets of invoices, in either
category, can be maintained only after obtaining permission from Assistant Commissioner.

Before putting the invoices into use, the serial numbers should be intimated to the Range
Superintendent and the invoices should be authenticated by the the owner or the working
partner or the Managing Director or the Company Secretary, of the assessee. However in
the case of removal of cigarettes, countersignature of the Inspector / Superintendent of
Central Excise is required to enable clearance.

The clearance invoice should contain the following details –

Excise Registration Number

Name & address of the Consignor / assessee
Name and address of the consignee
Excise Registration Number of the Consignee (in respect of certain intermediate
items of Iron & Steel etc.)
Description of the cleared goods
CETH classification of the goods
Quantity of the Goods
 Unit of measurement
Value of the goods
Rate of duty
Central Excise Duty payable on the goods
Time and date of removal
Mode of Transport and Vehicle number (in case of LTU's).

Rate of duty and value of cleared goods adopted on the invoice, is the prevailing duty rate
and value at the time of actual removal from factory / warehouse or date of receipt by the
buyer (in the case of khandsari molasses) or date of issue of goods (in respect of captive
consumption).

Separate invoices are to be used if a single consignment is broken up into lots and
despatched at different points of time in the same day or different conveyance or on
different days.

Supplementary invoice is to be raised, in case of any additional duty is to be paid. Though

not specified in the Rules, it is preferable to maintain the running serial numbers used
normally and the supplementary invoice should bear a cross reference to the original
invoice, for ease of reference.

Invoices issued by manufacturer, is to be in triplicate (Original for Buyer, Duplicate for

Transporter, Triplicate for assessee). Invoices issued by Dealer are to be prepared in
quadruplicate (i.e Triplicate for Central Excise and Quadruplicate for Assessee).

In case of packaged goods, the details on the invoice should give sufficient information to
correlate the packaged product with the invoice.

If prima-facie, it is found that removal of goods has been done without invoice or without
payment of duty (except for LTU's) or without declaring the correct value for payment of
duty or by using non-genuine invoices or if invoice has been issued without delivery of the
goods, then these can lead to withdrawal of the facilities in respect of monthly duty
payment, self-authentication of invoices, restriction of Cenvat Credit utilisation for the
concerned manufacturer, dealer or exporter. In the case of dealer, licence will be
suspended and Cenvatable invoices cannot be issued.

Finished goods can be removed to Central Excise registered Public / Private warehouse,
without payment of duty along with Application (in quadruplicate) and Duplicate copy of
invoice.

Re-warehousing Certificate to be sent by Range officer of the Consignor, to counterpart at

Consignees end within 90 days.

Inputs / capital goods can be removed 'as such' or after partial processing of inputs, by
reversing the Cenvat Credit or Education Cess availed initially on the said inputs or capital
goods. Duty is not payable on capital goods, if they have been put to use, because capital
goods are not finished products manufactured by the production process.

Inputs / capital goods can be removed 'as such' or after partial processing of inputs, for
any purpose to a jobworker and received back in 180 days. Record of the challans used
for this purpose, is to be maintained.
In addition to the above mentioned important events, your Organisation is also required to
maintain records regarding jobwork, Bonds & Cenvat credit too.

Regards.
For STL