RULE 173G. Procedure to be followed by the assessee

(1) Every manufacturer, other than a manufacturer who is availing of the exemption under a notification based on value of clearances in a financial yer, shall discharge his duty liability in respect of clearances of excisable goods from the place or premises specified under rule 9 or from a store room or other place of storage approved by the Commissioner under rule 47 made;

(i) during the first fortnight of the month, by the twentieth day of that month;

(ii) During the second fortnight of the month; other than the month of March, by the fifth day of the succeeding month; and

(iii) during the second fortnight of March, by the 31st day of the said March.

(Above sub-rule Amended vide Ntf. No. 10/2001-CE(NT) dated 14/03/2001.)

(I) The manufacturer shall pay, by the 31st day of March, a sum equal to the aggregate of -

(A) The amount of duty payable on actual clearances made up to the twenty fifth day of March; and

(B) an amount calculated, for the remaining six days of March, pro-rata of the actual duty payable under (A) above.

(II) Where the payment made in the manner specified in sub-clause (I) above, -

(A) is less than the actual duty liability for the second fortnight of March, the manufacturer shall pay the balance amount of duty by the twentieth day of April of that year;

(B) is more than the actual duty liability for the said second fort- night of March, the excess amount may be adjusted against the duty liability for the first fortnight of the month of April of that year and where such adjustment is not possible for any reason, against the duty liability for any subsequent fortnight.

Illustration I. A manufacturer clears goods worth Rs. 90 lakhs during the period from 16-3-2001 to 25-3-2001 and goods worth Rs. 60 lakhs during the period from 26-3-2001 to 31-3-2001. Assuming that the rate of duty is 16% ad valorem, the manufacturer shall pay a sum of Rs. 14.4 lakhs plus Rs. 8.64 lakhs (90/10) x 6 x 0.16 by 31-3-2001. The manufacturer shall pay the balance of duty liability of Rs. 0.96lakhs (Rs. 24lakhs minus Rs. 23.04 lakhs) by 20-4-2001.

Illustration II. A manufacturer clears goods worth Rs. 90 lakhs during the period from 16-3-2001 to 25-3-2001 and goods worth Rs. 50 lakhs during the period from 26-3-2001 to 31-3-2001. Assuming that the rate of duty is 16% ad valorem, the manufacturer shall pay a sum of Rs. 14.4 lakhs plus Rs. 8.64 lakhs (90/10) x 6 xO.16 by 31-3-2001. The manufacturer is eligible to utilize the excess payment of Rs. O.64lakhs as adjustment against the duty liability for the first fortnight of April or any subsequent fortnight.

(aa) Every manufacturer availing of the exemption under a notification based on the value of clearances in a financial year shall discharge his duty liability in respect of clearances made during a calendar month, by the fifteenth day of the succeeding month.

Explanation :- For removal of doubts, it is hereby clarified that the duty .liability under clause (a) or clause (aa) shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the date specified.

(b ) The manufacturer shall maintain an account current with the commis- sioner and shall discharge his duty liability by debiting such ac- count-current or by utilising CENV AT credit , in the following manner:

(i) the manufacturer shall assess the duty due on the excisable goods intended to be removed, for each consignment and shall enter the Particulars of such consignments amount of duty payable had been substituted, the words and figures in Daily Stock Account maintained under Rule 53;

(ii) the manufacturer shall indicate on each invoice, issued under rule 52A, the amount of duty payable.

(iii) at the end of each fortnight, the manufacturer shall determine the total amount of excise duty payable on the excisable goods re- moved during the fortnight, and he shall discharge the total duty liability so payable by making debit entry in the account current or by utilising CENV AT credit, as the case may be.

(c) The duty of excise shall be deemed to have been paid for the purposes of these rules, on excisable goods removed in the manner prescribed in this sub-rule, and the credit of such duty, as may be prescribed, under any rule, will be permissible.

(d) If the manufacturer fails to pay the amount of duty payable by the due date, he shall be liable to pay the outstanding amount along with interest the rate of twenty four per cent. per annum on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount.

(e) If the manufacturer defaults on account of any of the following reasons, namely :-

(i) full payment of anyone instalment is discharged beyond a period of thirty days from the date on which the instalment was due in a financial year, or

(ii) the due date on which full payment of instalments are to be made is violated for the third time in a financial year, whether in succession or otherwise,

then the manufacturer shall forfeit the facility to pay the dues in instalments under this sub-rule for a period of two months, starting from the date of communication of an order passed by the proper officer in this regard or till such date on which all the dues are paid, whichever is later and during this period the manufacturer shall be required to pay excise duty for each consignment by debit to the account current referred to in clause (b) and in the event of any such failure it will be deemed as if such goods have been cleared without payment of duty and the consequences and penalties as provided in the Central Excise Rules shall follow .

(Above para has been amended vide Ntf. No. 1/2001- Central Excise (N.T), dated 11-01-2001)

(IA) Where an assessee keeping an account-current under sub-rule (1) makes an application to the Commissioner for withdrawing an amount from such account-current, the Commissioner may, for reasons to be recorded in writing, permit such assessee to withdraw the amount in accordance with such procedure as the Commissioner may specify in this behalf.

(2) Notwithstanding the provisions of sub-rule (1) of rule 224 but subject to the other provisions of that rule and the provisions of rule 173FF, every assessee shall except as otherwise expressly provided in these rules, forthwith remove the goods on which duty has been determined and paid; every such removal shall take place under an invoice or invoices in accordance with the provisions f rule 52A but Without the proper officer s countersignature, and such invoice or invoices shall also show the rate and the amount of duty paid on such goods and the time of actual removal of the goods from the factory:

Provided that -

(i) a single invoice may be issued at the end of the factory day to cover removal of goods consumed within the factory in a continuous process;

(ii) the Commissioner may, having regard to the nature of the goods manufactured or frequency of removals permit an assessee or a class of assessees not to enter the rate and/ or the amount of duty on the invoices under which such goods are removed from the factory;

(iv) in respect of removal of any excisable goods between appointed time and 12.00 (midnight) on the appointed date, the provisions of sub-rule (1) of rule 224 shall apply;".

(Above clause(iv) has been substituted vide Ntf.No.2/2001-Exc.(NT), Dt. 2/2/2001)

(vi) where any correction, other than one relating to the date or the time of removal of the goods or to the description of the goods (including the variety of goods, the number and description of packages and the identification marks thereon), becomes necessary in any invoice before removal of the goods, such correction may be made by the assessee provided this is done neatly and over his dated signature in all copies of the invoice; and

(vii) where the assessee, after he has debited the duty due on the goods in the account-current referred to in sub-rule (1), finds it necessary to cancel any invoice, he shall send an intimation thereof in writing to the proper officer not later than the working day next following the day on which such invoice is cancelled, and may thereupon take credit of the duty in that account;

(2A) Every assessee shall file with the proper officer the triplicate copies of the invoices or like documents issued,

(a) during first ten days of a month, on or before the twelfth day of the same month;

(b) during the next ten days of the month, on or before the twenty-second day of the same month; and

(c) during the remaining days of that month, on or before the fifth day of the following month,

along with a covering list showing the serial number of such invoices as well as opening balance, credits debit and closing balance in his account-current and in his account maintained in Form R.G. 23A, Part II and Form R.G. 23C Part II.

provided that an assessee availing of the exemption under a notification based on the value or quantity of clearances in a financial year, shall file with the proper officer the triplicate copies of the invoices or like documents issued during a quarter, on or before the fifth day of the following quarter along with a covering list showing the said number of such invoices as well as opening balance, credit, debit and closing balance in his account current and in his account maintained in Form RG 23A, Part II and Form RG 23C Part II.

(3) Within ten days after the close of each month every assessee shall, in lieu of the returns prescribed under rule 54, file with the proper officer in quintuplicate a monthly return in the proper form showing the quantity of excisable goods manufactured or received under bond during the month, the quantity (if any) used within the factory for the manufacture of another commodity , the quantity removed on payment of duty from the place or premises specified udder rule 9 or from the store-room or other place of storage approved by the Commissioner under rule 47, duty paid on such quantity, particulars of invoices or like documents under which such quantity was removed; the quantity removed without payment of duty for export or otherwise and such other particulars as may be elsewhere prescribed or as the Commissioner may, by general or special order, require, and where so required by the Commissioner, by written notice, shall submit a similar return in the proper form showing all the other products manufactured in and issued from the factory during the same month. , Every such return in respect of excisable goods shall be accompanied by -

(b) receipted treasury challans on which deposits in the account-current were made by payment into the Government treasury; and

(c) original and duplicate copies of the account-current and also of the account in Form R.G. 23 and RG 23C, as the case may be, maintained by the assessee during the period covered by the return;

(d) any other document or documents as the Commissioner may require,

and if there was no stock, production and removal of excisable goods during the said period, the assessee shall file with the proper officer a nil return, unless otherwise directed by the Commissioner

Provided that the Commissioner may, having regard to the nature, variety and extent of production or manufacture or frequency of removals -

(i) fix in relation to any assessee or class of assessees a period shorter than one month for filing the aforesaid return;

(ii) permit that the aforesaid return may be filed by the assessee within a period not exceeding 21 days after the close of each month.

(a) Every assessee shall maintain such accounts, as the Commissioner) may from time to time require or permit, subject to such conditions as may be specified by him of the production, manufacture, storage, delivery or disposal of the goods, including the materials 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.

(b) Unless specially exempted by the Commissioner by order in writing, all books of accounts maintained under clause (a) shall be sent by him, before these are brought into use, for authentication by the proper officer in such manner and at such time as the 1Commissionerl may direct.

(c) In respect of any assessee, or class of assessees, the Commissioner may direct that all books of accounts maintained under clause (a), subject to what has been stated in clause (b), shall be deemed to be the proper form for the respective purpose.

(5)(a) Every assessee shall furnish to the proper officer, a list in duplicate, of all the records prepared or maintained by him for accounting of transactions in regard to receipt, purchase, manufacture, storage, sales or delivery of the goods including inputs and capital goods.

Explanation. -For the purposes of this rule, -

(i) the expression records shall include account, agreement, invoice, price-list, return, statement or any other source document, whether in writing or in any other form;

(ii) the expression source documents means all documents which form the basis of accounting of transactions and include sales invoice purchase invoice, journal voucher, delivery challan and debit or credit note.

(b) Where an assessee maintains or generates such records by using computer, such assessee shall submit the following information to the proper officer, namely:-

(i) documentation including policy and procedure manuals, instructions to record the flow and treatment of transactions through accounting system, from the stage of initiation to closure and storage;

(ii) account of the audit trail and inter-linkages including the source document, whether paper or electronic, and the financial ac- counts; and

(iii) record layout, data dictionary and explanation for codes used and total number of records in each field along with sample copies of documents.

Whenever changes are made in the systems adopted by the assessee, he shall inform the proper officer and submit the relevant document.

(c) The assessee shall be responsible for keeping, maintaining, retaining, and safeguarding records.

(6) (a) Every assessee shall, on demand make available to the Central Excise Officer or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, -

(i) the records maintained or prepared by him in terms of clause (a) of suh-rule (5);

(ii) the cost audit reports, if any, under section 233B of the Companies Act, 1956; and

(iii) the Income-tax audit report, if any, under section 44AB of Income-tax Act, 1961, for the scrutiny of the officer or audit party, as the case may he.

(b) Every assessee who is having more than one factory and maintains separate records in respect of every factory for the purpose of audit then, he shall produce the said records for audit purposes.

(c) Where the Commissioner or the Comptroller and Auditor General of India decide to undertake the audit of the records of any assessee, the said assessee shall be given notice thereof at least fifteen days before the commencement of such audit. The audit party deputed for the purpose shall also call for in writing the records, which are required to be produced by the assessee, either before or during the course of audit.

(d) Every assessee, who maintains or generates his records by using computer, shall provide the required records in the form of tapes or floppies or cartridges or compact disk or any other media in an electronically readable format as prescribed by the Commissioner at the time of audit. The copies of records, so furnished, shall be duly authenticated by the assessee.

(e) All records submitted to audit party in electronic format shall be used only for verification of payment of duties of excise or for verification of compliance of the provisions of the Central Excise Act, 1944 or the rules made thereunder and shall not be used for any other purpose without the written consent of the assessee.

(7) Notwithstanding the provisions of sub-rules (1) and (3), an assessee manufacturing excisable goods specified in this behalf by the Central Government by notification in the Official Gazette1, whose duty liability in the preceding financial year did not exceed five hundred rupees or who being a new assessee does not expect to be liable to pay more than five hundred rupees as duty in the relevant financial year, may, after informing the proper officer in writing, pay duty in respect of each separate consignment at the time of removal instead of keeping an account-current with the Commissioner, and may also file the return prescribed insub-rule (3) fora quarter within seven days after the close of every quarter instead of filing the monthly return.

(8) In respect of a manufacturer availing of the exemption under a notification based on the value or quantity of clearances in a financial year, the provisions of this rule shall have effect in that financial year as if for the word "month", wherever it occurs, the word "quarter", and for the word "monthly", wherever it occurs, the word "quarterly" were substituted.

(9) Every assessee shall preserve the records including book of accounts, and source documents and data in any electronic media, where any document is . generated on computer, for five years immediately after the financial year to which the records pertain.