Records :
Records shall mean all the records prepared or maintained by the assessee for accounting of transactions with regard to receipt, purchase, manufacture, storage, 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.
Prior to April 2000, the rules had prescribed the records to be maintained, referred to as ‘Statutory records‘. The statutory records under Central Excise Rules, 1944 were dispensed with in the year 2000 and it was decided to rely on private records of the assessee which they usually maintain for their activities. This was done as a measure of simplification and for adopting a common accounting system. While framing the Central Excise (No.2) Rules, 2001 and subsequently, the new 2002 rules issued under the Central Excise Act, 1944, the Government has continued with the policy of relying on the private records of the assessee.
1. Main features: The main features of the acceptance of private records are as below: –
(a) No statutory records: The fact that the rules do not prescribe ‘statutory records‘ shall not be construed that no record has to be maintained. Every assessee has to compulsorily maintain private records.
The rules which require certain records to be maintained are self contained and they specify the minimum information that an assessee MUST enter in their own record by which the assessee has to decide himself as to the form in which they are going to maintain such information.
(b) No format for record-keeping except 100% EOU: There is no format for record– keeping, except in the case of rule 17 of the said rules where it is provided that the 100% EOU unit or a unit in FTZ/SEZ shall maintain in proper form appropriate account relating to production, description of goods, quantity removed, duty paid and each removal shall be made on an invoice. This format has been notified by Notification No. 59/2001-Central Excise (N.T.) dated 6th August, 2001.
This means that the assessee is free to devise his record-keeping, depending upon his accounting requirements, but shall ensure that the requirements of particular rules are met.
(c) Daily Stock Account [Rule 10]: There is a specific requirement about maintenance of ‘Daily Stock Account‘ in rule 10 of the Central Excise Rules, 2002. It provides that every assessee shall maintain proper records, on a daily basis, in a legible manner indicating the particulars regarding
a. description of the goods produced or manufactured,
b. opening balance, quantity produced or manufactured,
c. inventory of goods,
d. quantity removed,
e. assessable value,
f. the amount of duty payable; and
g. particulars regarding amount of duty actually paid.
The first page and the last page of each such account book shall be duly authenticated by the producer or the manufacturer or his authorised agent.
No pre-authentication of records required: There is no requirement of ‘authentication‘ of records by jurisdictional Central Excise Officer before a book/register is brought into use by an assessee. These records (relevant for Central Excise) shall, however, be authenticated on the first and last page by the assessee in the same manner as the Daily Stock Account.
Preservation of records: Records shall also be preserved for a period of five years immediately after the financial year to which such records pertain. Such records may be preserved in electronic form and every page of the record so preserved shall be authenticated by means of a digital signature. The Board may notify the conditions, safeguards and procedure to be followed by an assessee preserving digitally signed records.
| For the purposes of this rule, the expressions, “authenticate”, “digital signature” and “electronic form” shall have the respective meanings as assigned to them in the Information Technology Act, 2000. |
(d) Furnishing of list of records to Range Officer [Rule 22(2)]: Every assessee, an importer who issues an invoice on which CENVAT credit can be taken and first stage and second stage dealer shall furnish to the Range Officer, a list in duplicate, of –
(i) all the records prepared and maintained for accounting of transaction in regard to receipt, purchase, manufacture, storage, sales or delivery of the goods including inputs and capital goods, as the case may be;
(ii) all the records prepared and maintained for accounting of transaction in regard to payment for input services and their receipt or procurement; and
(iii) all the financial records and statements (including trial balance or its equivalent).
(e) Furnishing of records on demand [Rule 22(3)]: Every assessee, an importer who issues an invoice on which CENVAT credit can be taken and first stage and second stage dealer shall, on demand make available to the officer empowered under sub-rule (1) or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India or Cost Accountant/ Chartered Accountant as nominated under section 14A/14AA of the Act, –
(i) the records maintained or prepared by him in terms of sub-rule (2);
(ii) the cost audit reports, if any, under section 233B of the Companies Act, 19561; and
(iii) the Income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961
for the scrutiny of the officer or the audit party or the cost accountant or chartered accountant, within the time limit specified by the said officer or the audit party or the cost accountant or chartered accountant, as the case may be.
(f) Every assessee who is having more than one factory, and maintains separate records in respect of every factory for the purpose of audit, shall produce the said records for audit purposes.
2. Non-maintenance of daily stock account: Non-maintenance of daily stock account as contemplated under rules or other information mentioned in other rules mentioned above by the assessee in his private records will mean contravention of specified rules attracting appropriate penal action. If such non-maintenance of records is with intent to evade payment of Central Excise duty, the more stringent penal provisions of the Central Excise Act and Central Excise Rules shall be attracted.
The private records relevant for Central excise including the Daily Stock Account maintained in compliance with the provisions of the said rules shall necessarily be kept in the factory to which they pertain.