CHAPTER 4

PART I

INVOICE SYSTEM
1. Introduction

1.1 An invoice is the document under cover of which the excisable goods are to becleared by the manufacturer. This is also the document which indicates the assessmentof the goods to duty. No excisable goods can be cleared except under an invoice. Theinvoice is the manufacturers own document and though the Department has specifiedthe entries thereon, the format etc. is left to the manufacturer’s choice.

2. Removals only on invoice

2.1 Rule 11 of the Central Excise (No.2) Rules, 2001 (hereinafter referred to as the saidRules) provides that no excisable goods shall be removed from a factory or a warehouseexcept under an invoice signed by the owner of the factory or his authorized agent.2.2 In case of cigarettes, which is under physical control, the Factory Officers areposted by rotation in the factory. If the factory is operation 24 hours, the officers areposted 24 hours. They check the operations of the assessee as per instructions, mutatismutandis, contained in Commodity Manual for Cigarettes. Accordingly, in the case ofcigarettes, each invoice shall also be countersigned by the Inspector of Central Excise orthe Superintendent of Central Excise before the cigarettes are removed from the factory.

3. Serially numbered invoice

3.1 The invoice shall be serially numbered and shall contain the registration number,description, classification, time and date of removal, rate of duty, quantity and value, ofgoods and the duty payable thereon. The serial number shall commence from 1 st Aprilevery year [beginning of a financial year].

3.2 The serial number can be given at the time of printing or by using frankingmachine. But when the invoice book is authenticated in the manner specified in sub-rule(5) of rule 11, each leaf should contain serial number. Hand written serial number shall notbe accepted.

3.3 In case of computer-generated invoice, the serial number may be allowed to begenerated and printed by computer at the time of preparation of invoice ONLY IF thesoftware is such that computer automatically generates the number and same numbercannot be generated more than once. For this purpose, the Central Excise Officers maycheck the system/software from time to time.

4. Number of Invoice copies

4.1 The invoice shall be prepared in triplicate in the following manner, namely:-

(i) the original copy being marked as ORIGINAL FOR BUYER;

(ii) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER;

(iii) the triplicate copy being marked as TRIPLICATE FOR ASSESSEE.

4.2 The above requirement is mainly for Central Excise purposes. However, theassessee may make more than three copies for his other requirements. But such copiesshall be prominently marked “NOT FOR CENVAT PURPOSES’.

5. Number of Invoice book

5.1 The rule 11 of the said Rules provides that only one invoice book shall be in use ata time, unless otherwise allowed by the Deputy/Assistant Commissioner of Central Excisein the special facts and circumstances of each case.

5.2 The Board has decided that where assessee requires two different invoice booksfor the purposes of removals for home-consumption, and removals for export they maydo so by intimating the jurisdictional Deputy/Assistant Commissioner of Central Excise.

5.3 Wherever, an assessee is allowed to keep more than one invoice book, he shouldbe asked to keep different numerical serial numbers for the different sets.

5.4 In case of running stationary used in computers, the bound book shall not beinsisted upon provided the stationary is pre-printed with distinctive names and marks ofthe assessee. After the invoices are prepared, the triplicate copy shall be retained inbound-book form. Where invoices are to be typed written, the leafs have to be first takenout from the book for typing. In such cases also the triplicate copy shall be retained inbound-book form.

6. Authentication of Invoices

6.1 The rule provides that owner or working partner or Managing Director orCompany Secretary shall authenticate each foil of the invoice book, before beingbrought into use. However, in order to facilitate the trade it has been decided that anyperson duly authorised in this regard by the Company, owner or working partner mayalso authenticate invoices. Copy of the letter of authority should be submitted to theRange office.

7. Intimation of serial numbers

7.1 Before making use of the invoice book, the serial numbers of the same shall beintimated to the Superintendent of Central Excise having jurisdiction over the factory ofthe assessee. This can be done in writing by post/e-mail/fax/hand delivery or any othersimilar means.

8. Rounding off of duty in invoice

8.1 The amount of duty being shown in invoices issued under rule 11 of the said Rulesshould be rounded off to the nearest rupee as provided for under Section 37D of theCentral Excise Act, 1944 and the duty amount so rounded off should be indicated bothin words as well as in figures.

9. Provisions of CENVAT Credit Rules, 2001 regarding availment of credit

9.1 Where the part consignments traveling in a convoy or separately do not constitute “complete machinery” falling under a single heading or sub-heading, eachsuch consignment will be classified on merits, say, as ‘parts’ and also a separate invoiceshowing the separate value arrived at under Section 4 of Central Excise Act, 1944 andthe duty amount, must accompany each such consignment.
ANNEXURE - A

Undertaking For Availing Special Procedure
I / We ________________________ hereby undertake that only thosecomponents of a ‘complete machinery’ in terms of rule 2(a) of the interpretative ruleto CETA which have first been assembled and constitute complete machinery fallingunder a single heading or sub-heading, and which are later dis-assembled only forthe convenience of transport shall be cleared under this procedure on payment ofentire duty as per the classification of such machinery / equipment and no ‘parts’not satisfying this criterion shall be transported with such components unlessappropriate Central Excise duty is paid as prescribed for ‘parts’ under the CentralExcise Tariff Act, 1985.

Date: Place:

(Authorised Signatory)

10. Preparation of invoices when goods dispatched through more than one vehiclebecause of their size

10.1 Considering the difficulties faced by the manufacturers in documentation wherea consignment of capital goods like heavy machinery, etc. which are first assembled bythe manufacturer and are later disassembled only for the convenience of transport isloaded in more than one vehicle and travel separately or at intervals, the followingprocedure should be followed:-

(i) The manufacturer will intimate, on case to case basis, his option to avail thisspecial procedure in writing for the complete machinery sought to becleared in a number of individual part consignments after first beingassembled to the jurisdictional Deputy/Assistant Commissioner of CentralExcise with a copy to the jurisdictional Superintendent of Central Excise alongwith the description of such machinery/ equipment giving its tariffclassification and list of components of such machinery/equipment in dis-assembledform and its value and an undertaking. These intimations shall begiven at least 48 hours prior to the removal on any working day.

(ii) Though separate verification need not necessarily be made for each andevery consignment, before the removal of the first consignment AssistantCommissioner should verify that the various part consignments are indeedconstituents of the complete machinery which has been first assembled.

(iii) A separate invoice shall be made out for in respect of each conveyance onwhich the part consignment is loaded.

(iv) The manufacturer will pay the entire duty on the first such invoice (hereinafterreferred to as “Parent Invoice”) on the basis of entire value of the machineryunit/equipment. This parent invoice shall be prepared quoting all vehiclenumbers, total value / duty of the consignment. An inventory shall beannexed to the invoice giving detailed item-wise description as loaded indifferent vehicles.

(v) The details of removals and duty payment shall be entered in Daily StockAccount.

(vi) Photocopy of the duplicate copy of the parent invoice duly attested by theauthorised signatory of the Company shall accompany each conveyance.

(vii) CENVAT Credit, if any, shall be taken only on receipt of parent invoice andthe entire consignment.

11. Cancellation of invoices

11.1 When an assessee is compelled to cancel invoice, the following actionsshould be taken:-

(i) Intimation of a cancelled invoice should be sent to the rangeSuperintendent on the same date, whenever possible. However, in caseof exceptional circumstances beyond the control of assessee shouldthis not be possible, the intimation should be sent on the nextworking day;

(ii) Along with the intimation of the cancelled invoice sent to the rangeSuperintendent the original copy of the cancelled invoice should alsobe sent.

(iii) Triplicate copy of the cancelled invoice may be retained by theassessee in the invoice book so that the same can be producedwhenever required by audit parties, preventive parties and othervisiting officers.

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