K.Vijay Kumar, M.A.,B.Ed., B.L.,
SUPERINTENDENT OF CENTRAL EXCISE
1. The Explanation to Rule 52A(1) defines invoice to mean :
- assessee's own document such as invoice, challans, advice or other document of similar nature generally used for sale or removal of excisable goods and which shall contain all the particulars as required under the said Act or in these rules; or
- such other form as the Central Board of Excise and Customs may notify.
2. The act or the rules do not require any particulars in the invoice. However Board in Circular NO.29/29/94-CX.6, dated.21.3.1994 stipulated that the invoice shall contain all the particulars in Annexure.A. This Annexure A became a sort of standard proforma for the invoice though its contents were neither required under the Act or rules (not withstanding the Board circular which cannot be taken as a rule) nor was it a form prescribed by the Board. So while under Rule 52A, the board has the power to notify the form of invoice and the Act or the rules have the power to require certain particulars to be contained in the invoice, the Act and rules are silent on this issue and Board which has the power to notify a form has not done that but prescribed the particulars (which only the act or rules could do).
3. Under Rule 52A(2), the invoice shall be made out in quadruplicate. Original is for the buyer, duplicate for the transporter and triplicate for the assessee and quadruplicate ? Nothing is said about the quadruplicate. Under the old rule, invoice had to be in quadruplicate, the triplicate for the department and the quadruplicate for the assessee. While amending the rule in November, 1996, the words "the invoice shall be made out in quadruplicate" was not amended. So today the legal position is that the invoice shall be made out in quadruplicate but no copy is required to be given to the Central Excise Range. Is it So?. Doesn't appear to be so Under Rule 173G(2A), the assessee shall file with the proper officer triplicate copies of the invoices… Under Rule 52A(2), the triplicate is meant for the assessee and under Rule 173G(2A), it is to be filed with the proper officer!
4. The second proviso to Rule 52A(2) requires, in the case of physical control, the invoice to be countersigned by the proper officer, who shall retain the triplicate copy of the invoice for his record. Rule 52A(3) requires the triplicate copy of the invoice to be marked as TRIPLICATE FOR ASSESSEE. After marking it so, is her to hand over to the proper officer ?
5. Rule 52A(6) requires that each invoice shall bear a printed serial (???) running for the whole financial year. The word NUMBER is missing from the rule. It says that invoice shall bear a printed serial… and not a printed serial number. So the rule really does not require the invoice to have a serial number! But this serial number of the invoices has caused several disputes of Modvat being disallowed for invoices not having printed serial numbers.
6. 52A(7) requires each foil of the invoice to be authenticated by the owner or working partner or Managing Director/Company Secretary. No MD or Company Secretary would like to spend his time authenticating invoices. Can he delegate this power ? Under Rule 3, when any person is authorised by the owner for all or any of the purposes of these rules, such person shall be deemed to be the owner. Then can a person authorised under Rule 3, authenticate the invoice ? He is deemed to be the owner and owner is one of the persons authorised to authenticate. Board in Circular No.29/29/94-CX, dated.21.3.1994 stipulated that in the case of proprietary concerns, owner or working partner or a power of attorney holder and in the case of companies, MD/Company Secretary or an officer authorised by the Board of Directors can only authenticate invoices. This became the benchmark in many Commissionerates and officers started asking for power of attorney and board resolutions. Rule.3 notwithstanding and Rule 52A(7) not stipulating any such thing.
- This rule also mentions INVOICE BOOK. Does this mean that the invoices are to be in a book form and loose foils will not be allowed ? Delhi Commissioner in Trade Notice No.41/95, dated.25/9/1995 stipulated that the invoice book should be in bound form. The required copies of the invoice should be taken out only at the time of issue of the invoice… The quadruplicate copy of their invoice should always be retained in the book. Hyderabad Commissioner issued identical instructions in his trade Notice No.23/95, dated 28.2.1995. However Board, in circular No.213/47/96-CX., dated 20-5-1996 clarified that invoices can be taken out of the book for preparation and the assessee's copy should be bound immediately after all the invoices of the relevant book are exhausted. Therefore the requirement is that the invoice has to be in a book from, but can be taken out of the book at the time of preparation, may be for typing and the assessee's copy has to be bound. In the earlier rule there was a requirement that the invoices (GPs) are to be written using double-sided and indelible pencil!
- This rule further stipulates that the serial number of the invoices shall be intimated to the Assistant Commissioner. When should the invoice be authenticated ? Before the invoice is issued or before intimating the Assistant Commissioner? Jamshedpur Commissioner in trade Notice No.47/94, dated.28.7.1994 emphasized that failure to authenticate the invoices whose serial numbers have been informed to the Assistant Commissioner will amount to contravention of Rule 52A(7)!
- Under Rule 52A(8), if any PERSON carries or transports excisable goods from a factory without a valid invoice, he is liable to a penalty up to three times the value of the goods and the goods are liable to confiscation.
Invoice is the assessee's own document, assessee as per Rule 2(3) is any person who is liable for payment of duty assessed and includes any producer or manufacturer of excisable goods or a registered person of a private warehouse in which excisable goods are stored. As per Rule 52A(1), no excisable goods shall be delivered from a factory except under an invoice. This will mean that even for exempted (but excisable) products, invoices have to be issued and if any person carried excisable goods from a factory without an invoice, he is liable for a hefty penalty and the goods are liable to confiscation !
- The Board and several Commissioners have issued a variety of instructions on various aspects of invoices. Some noteworthy ones are as follows :
- Belgaum Commissioner has specified the pattern of numbering the invoices
- Board had clarified that invoices can be numbered with automatic numbering machine.
- Bombay-II Commissioner has specified the manner of entering time.
- Under Rule 57GG(4), the registered person shall issue an invoice … As per rule 52A (1), the term invoice used in any rule shall mean assessee's own document. A registered person under Rule 57GG is not an assessee. Then what is the invoice issued by him ?
- If this is the confusion regarding manually made out invoices, those generated on computers have generated more controversies than invoices. Though computer gate passes and invoices have been in use for many years, strangely the rules do not specify any procedure for computerized invoices and Commissioners and Board have issued a plethora of instructions causing further confusion.
- Rule 52A does not prohibit computer invoices. But those generating invoices on the computer face certain problems in complying with the rules like.
- Maintaining an invoice BOOK with each invoice in triplicate and serially numbered. As per the Board's instructions quoted above, invoices can be taken out of the book and numbering can be done by automatic numbering machines.
- Authentication of computer stationery is difficult. The stationery can be bound and kept and pre-authenticated.
- What about continuous running stationery ? Here there is a real problem as the rule speaks about invoice book and does not meant ion sheets of running paper.
- Should all the three copies of the invoice be printed at the same time using carbon paper or can each copy be printed separately ? The rules do not require the three copies of the invoice to be printed at the same time. It does not even mentioned about a carbon paper. Even a person who writes the invoice or types it can type or write each copy separately or use a carbon.
- Should the stationery be pre-printed and the serial numbers need not be pre-printed. Does that mean that an assessee can have a bound book containing blank pages with printed serial numbers and each number having three folios for original, duplicate and triplicate and remove these blank pages and feed into a computer printer whenever he wants an invoice ? As per the rule YES.
- But computerization of invoices is not all the simple. None of the above views are accepted. There are several instructions on computerization. In spite of massive computerization in all fields, we are not fully ready to accept the electronic change. It takes a little time before we can come out of the double sided carbon and indelible pencil days. If you remember, electronic voting was introduce din India in that highly (or rather totally) literate state of Kerala about twenty years ago and the result was struck down by a court as voting means putting a ballot into a box and in the electronic voting there was not ballot. At that time a retired judge remarked, "if that is really the definition of voting, what should change was the definition". It was only in 1998 that electronic voting was again tried and what a success it was ! There is a lot of computer illiteracy in Excise also and a computer-generated invoice is viewed with a lot of suspicion. It may be true that there is a lot of scope for computer manipulation but that is no reason to stop computerization.
- While the rules do not required any permission to use computerized invoices, many of the Commissioners have insisted on prior permission for using computerized invoices. I hope a day will come when assessees will have to take permission to use manual invoices ! (using computerized invoices will be mandatory)
- Board in letter F.No.212/3/94-CX., dated 4.4.1994 clarified that invoice prepared in computer is acceptable under Rule 173C and 52A. The assessees may be educated and advised to incorporate or add the additional particulars as in Annexure-A… There should not be any harassment on account of any minor lapses in the format of the invoices and the Central Excise Officers should endeavour to help and assist the assessees in this transitional period. The computerized invoice shall bear the running serial number generated in the system or otherwise duly authenticated as required under the aforesaid rules.
- Hyderabad Commissioner in Trade Notice No.8/96, dated 9-2-1996 maintained that prior permission of the Commissioner is required to be obtained before issuing computerized invoices and such issue of invoices without prior permission can invite penal action under the Central Excise Law though he did not mention which part of the law.
Delhi Commissioner in Trade Notice No.30/97 stipulated that invoices are printed on computer stationery and bear a pre-printed running serial number.
One Commissioner in his Trade Notice no.1/98 published in 1998 (98) E.L.T. (T36) (E.L.T. did not mention which Commissioner) insisted that computerized invoices should be generated on pre-printed stationery with pre-printed serial numbers. He had not specified what are the details that are to be pre-printed on the invoice.
Board in circular No.180/14/96-CX., DATED 7.3.1996 had clarified that it may not be necessary to pre-print Sl.No. on computerized invoices.
Some Commissioners have asked assessees to submit copies of the invoices and software programmers before permission can be given.
Pune Commissioner in his Trade Notice No.53/98, Dated.23.6.1998 reiterated that computer generated invoices should bear pre-printed serial numbers and that no computer serial number generated invoices will be accepted in Pune Commissionerate.
Hyderabad Commissioner in his Trade Notice No.3/98, dated 12-1-1998 declared "It has also been decided that all computer generated Central Excise invoices should necessarily be pre-printed and pre-numbered before being brought into use".
- So the thrust of most of the instructions of the Commissioners are that invoices generated on the computers shall be pre-printed and have pre-printed serial numbers.
- What is pre-printed invoice ? The Computer actually prints the invoice; so should something be printed before the invoice is printed ? I think the whole idea is that the proforma of the invoice shall be pre-printed and the variable should only be printed in the computer. This confusion actually has its roots in another rule and notification. As per Notification No.23/95, dated 30.5.1995 issued under Rule 57GG, the invoice generated on computer shall be pre-printed containing name, address etc. But this is applicable only for the dealers' invoices. What many Commissioners have tried to do is adapt this requirement for Rule 52A but no body has specified as to what are the details to be pre-printed in the computer generated invoices. If this is to be adopted for Rule 52A also, Rule 52A has to be suitably amended.
As to pre-printing of serial numbers, the rule actually does not required any number to be printed, let alone pre-printed. As said in para 5 the word "number" is missing from the rule. Now with Rule 52A (7) granting exemption from pre-authentication and intimation of serial numbers, an assessee who has obtained such permission can print his serial numbers any time.
- Nobody would have imagined that the simplified invoice could create so much confusion.
- It is humbly suggested that :
- The rules may be amended to rectify the bloomers
- Uniform procedure may be followed throughout the country
- The procedure should form part of the rules or a notification.
EXCISE LAW TIMES – 01.04. 1999 – A 29