The system of filing monthly invoices was done away with in the 1996-97 Budget to reduce documentation, both at the manufacturer and central excise levels. For units in small-scale sector, the filing was being done on a quarterly basis.

Before the system was stopped, the manufacturers had to file four copies of the sale invoice -- one each for the buyer, transporter, excise department and himself.

According to sources the department of revenue is divided over the issue. One section is of the view that the system should be reintroduced to have proper verification at the manufacturer's end itself, specially in the small-scale sector, as it is a potential area of revenue leakage.

While others are of the opinion that the system would not be a facilitation measure and would greatly increasethe scope of work of not only the excise department but also the manufacturer. They felt that even when the system of filing monthly sale invoices was in place, it wasnot being utilised properly.

The corporate sector is expected to oppose any move to reintroduce the system as it would mean filing thousands of additional invoices every month. In any case, reintroducing the system will be very difficult before the next Budget, sources added.

Besides this, the revenue department, which is under tremendous pressure on account of low indirect tax collection, intends taking other measures to put at place a proper system of verification to avoid under-valuation of goods and also reduce cases of Modvat misuse.

Department sources said manufacturers indulge in various kinds of Modvat irregularities including forged invoices and issuing of subsidiary invoices through dealers. The problem is higher on imported goods as they are brought in on a bill of entry rather than an invoice and chances of detection are remoteif someone takes Modvat on forged bills of entry.