Bharat Petroleum Energizing Life

Central Excise duty is paid on petroleum products at the time of their removal from Refinery or Bonded Location. Petroleum products are being supplies to industrial- customers who use these products as an input or fuel in their manufacturing system for manufacture of other excisable goods. These Industrial - customers can claim MODVAT credit of the duty paid by us and use this credit for debiting the duty on their final products.

When goods are supplied from Refinery or Bonded Location, Invoice has to be issued as per Rule 52A of the Central Excise Rules, 1944. On the basis of duplicate copy of the invoice, the industrial-customer can avail MODVAT credit. However, when goods are supplied to the industrial-customer out of duty paid stock from a Depot/Despatch Unit/Bottling Plant, the industrial-customer should be given an Invoice under Rule 57G so that he can claim MODVAT credit. The contents of invoice under Rule 52A are given in Annexure I and the contents of invoice under Rule 52A are given in Annexure I and the contents of invoice under Rule 57G are given in Annexure II.

Under Rule 57G of the Central Excise Rules, 1944, Modvatable invoice can be issued by :

• manufacturer from his debt
• dealer of an excisable goods registered with Excise Dept.
• an importer from his godown
• dealer of an imported goods registered with Excise Dept.

Every location before issuing invoice under Rule 57G should get itself registered under Rule 174. Such registered Location is allowed to issue MODVAT invoices in the prescribed format. The location is required to maintain the record of goods received and issued, as prescribed under the rules and to file a monthly return with the Excise Department within seven days of the closing of every month.

The location desirous of obtaining Excise Registration for issuance of MODVAT invoice has to submit an application in the form R-1 in duplicate to the Range Superintendent of Central Excise. IN the application form, description and tariff heading number of the goods for which MODVAT invoices are intended to be issued, have to be mentioned. The list of goods with tariff heading number is given as Annexure III.

Registration Certificate shall be valid only for the premises specified therein and therefore, at the time of making an application for registration the details of business premises and arrangement for receipt, storage and onward despatch of excisable goods be invariably given. A godown can be either owned by the registered Locations , rented wholely or partially, leased from a private godown owner or public sector godown. There should, however, be a legal arrangement so that to enable verification of the premises as well as of the goods stored therein, by the central Excise officers.

In respect of liquid an gaseous products transported in tankers, the condition of godown is not insisted upon provided these goods are delivered to the buyers from the same tankers in which they have been received.

The Registration Certificate is valid only for the premises and the purposes mentioned in the schedule. The Registration Certificate or a copy thereof should be exhibited in a conspicuous part of the registered premises.

In case some addition or deletion or correction are required to be done, then the location should approach the range Superintendent with an application. The Superintendent, after necessary verification, will endorse the same in the Registration Certificate already issued.

MODVAT invoice can be issued in respect of excisable goods mentioned in the Registration Certificate. When a particular item is not specified in the Registration Certificate but the Location intends to issue MODVAT invoice, it cannot do so unless the Range Superintendent amends the Registration Certificate. MODVAT invoice issued in respect of non-specified excisable goods is an invalid document and credit of duty will not be available to the customer on such MODVAT invoice.

Incase the location decides to shift the Office premises registered with the excise department to another premises, it is mandatory for such location to obtain a fresh registration Certificate for the new premises and to surrender to old Registration Certificate to the Range Superintendent.

In case there is a Breach of any conditions of the Act or the Rules, the Registration Certificate may be revoked or suspended by the Excise Officer.

Every Registered location should maintain a stock account in form RG-23D, proforma of which is given as Annexure IV.

There are 2 situations relating to passing of MODVAT Credit by a Registered Location. A registered location receives a consignment under Rule 52A invoice from a Refinery / Installation. Then it issued invoice under Rule 57G. In the second situation, the registered location receive the consignment from another registered location on the strength of invoice/PDN under Rule 57G.

Whenever, a registered location receives a consignment under Rule 52A invoice or 57G invoice and in respect of the same, the location proposes to issue either one or more modvatable invoices, then the location should keep complete account of each such consignment and all transactions relating thereto in RG-23D register.

In respect of any consignment, part of which is sold under Modvatable invoice, and the other part under the cover of non-modvatable invoice, then the details of sales under non-modvatable invoices have also to be entered in the prescribed register RG23D by making a consolidated entry at the end of the day indicating such quantity and invoice numbers. The non-modvatable invoices are not required to be issued in the prescribed proforma.

A registered location need not enter into RG-23D Register details of those consignments received under Rule 52A invoice or 57G invoice for which it has no proposal to issue Modvatable invoices.

The registered Location should maintain the RG-23D Register at the end of the day of the day of receipt and issue of excisable goods and should correctly maintain such book, account or register and should not cancel, obliterate or alter any entry except for correction of any errors. The location should keep the books, account or register at all time ready for the inspection by the Excise officer and should permit any Excise Officer to inspect it and make any such minute as the officer thinks fit.

The registered Location can make entry in RG-23D only when MODVAT documents accompany the excisable goods. In the absence of such documents, the registered Location should not enter the details in the register

The transport document relevant for MODVAT credit should be shown in the records of the location, both while it receives the goods and also while it passes on the goods down the line through others, who will in due course claim MODVAT Credit.

For a location to issue MODVAT invoice in addition to registering itself with excise department, it is mandatory that the procurements made are on proper documents so that It can pass on the MODVAT benefit to the buyer of goods. These documents should accompany the receipt of goods. The documents based on which it can issue MODVAT invoices are:

• If the procurement are directly from the Refinery, the duplicate copy of invoice under Rule 52A issued by the Refinery.
• If the goods have been received from a bonded location , then the duplicate copy of PDN issued by the despatching location under Rule 52A.
• If the procurements are supplied by another location that is duty paid location, then the duplicate copy of PDN issued by the despatching location under Rule 57G.
• If the procurements are imported goods then the triplicate copy of bill of entry accompanying the goods.

There is no necessity of authentication of authentication of Excise officer on the Register RG-23D before it is brought into use.

In the RG-23D register, separate entries in the issue side are to be made against each valid invoice / PDN till the stock is exhausted. In case such document contains more than one registered commodity, separate entries using separate pages are to be made in the receipt portion of the register.

Books, accounts or registers of Registered Locations should be kept ready at all times for inspection by Central Excise officers. The inspection officer is permitted to make any minutes in such records. The central Excise officer is empowered to take any extract from such records.

The Registered Location on demand by a Central Excise officer should send the records to his office.

The Registered Location should preserve documents specified under Rule 57GG for a period of five years and same should be produced to the Central Excise officer as and when demanded. The documents needed to be preserved for a period of five years can be listed as under :

• Documents such as original and duplicate copies of incoming invoices / PDNs under Rule 52A or Rule 57G.
• Documents such as triplicate copy of MODVAT invoice, RG 23D register, monthly return and other related records prepared by the Registered Location.
• Any other document prepared under Central Excise Law and related correspondence.

The documents such as application for Registration and Registration Certificate may be preserved by the registered Location permanently. Even the supplementary request made with the department for addition and deletion of certain information in the Registration Certificate may be preserved permanently.

If any Registered Location or Dealer enters wailfully any wrong or incorrect particulars in the invoice issued for the excisable goods dealt by him with intent to facilitate the buyer to avail of credit of duty in respect of such goods shall be liable to confiscation and the registered location shall be liable to penal action in terms of Rule 173Q of the Central Excise Rules.

The Registered Location is required to issue invoice for sales affected to MODVAT customers in the prescribed format and colours. The format is given in Annexure II. With effect from 1.8.95, MODVAT invoices issued under Rule 57G should be in different colours : original in white, duplicate in pink, triplicate in yellow and quadruplicate in green colour.

Only one invoice book of each type shall be used by the registered location for removal of excisable goods unless otherwise specially permitted by the Asst. Commissioner in writing.

Minimum four copies should be prepared. Copies of the invoice should be marked at the top in bold capital letters in the following manner :

• Original copy should be marked as Original for Buyer
• Duplicate should be marked as DUPLICATE FOR TRANSPORTER (to be used for availing MODVAT credit)
• Triplicate should be marked as TRIPLICATE FOR CENTRAL EXCISE
• Quadruplicate should be marked as QUADRUPLICATE FOR REGISTERED PERSON
• Extra copies should be marked as NOT FOR EXCISE PURPOSE

If more than four copies are required for any use by the Location, the same can be done after intimating the jurisdictional Asst. Commissioner of Central with a copy to the Range Superintendent.

Each MODVAT invoice issued by the location should bear a printed serial number, beginning from 1st April of the year. Each foil of the invoice book should be pre-authenticated by the officer of the Company duly authorised by a resolution of the Board of Directors. A copy of Board Resolution enclosed as Annexure V. Such authentication should be by putting signature on the right side corner of each foil of MODVAT invoice and showing name and the designation of the person who is authenticating the invoice below the signature

Name, address and Central Excise Registration number of the registered location issuing the invoice, name of the jurisdictional range / Division / Commissionerate and Company's Income Tax Number and Sales Tax Registration Number should be pre-printed on 57GG invoices. Further, the first and last copy of the invoice book should be pre-authenticated by the jurisdictional Range Superintendent of the Central Excise. Such pre-authentication by Range Superintendent is not necessary in case of invoices generated on computer.

Serial Numbers of the Invoice before being brought into use, should be intimated to the jurisdictional Asst. commissioner and a dated acknowledgement of receipt of such intimation may be obtained and retained by the Registered Location.

Records and invoice generated through computer are also recognised. In that case, the serial number likely to be used in the forthcoming quarter should be intimated to the Asst. Commissioner. As soon as the said serial Nos. are exhausted, a revised intimation may be sent. Such registered Location should also send details of the software used including the format for information of the Asst. commissioner in case he demands.

The original copy of the MODVAT invoice should be sent to buyer and the duplicate copy should be sent alongwith the conveyance carrying the particular consignment. Only on the basis of the buyer. Only on the basis of Duplicate copy of invoice, MODVAT credit would be available to the buyer. The triplicate copy should be sent to the Range Superintendent alongwith the monthly return. The quadruplicate copy has to be retained by the Location as an office records. The extra copies should be used for the purpose mentioned on the face of the invoice.

Locations issuing invoice under Rule 57G should file with the jurisdictional.