CIR NO.689/05/2003-CX, DT. 14/01/2003

Maintenance of records by First Stage and Second Stage dealers and pre- authentication of invoices issued by Second Stage dealers/ dealers of imported goods-reg.

I am directed to say that Board has observed that different practices are being followed in field formations on the issue of maintenance of records by first stage and second stage dealers and pre-authentication of invoices issued by second stage dealers/ dealers of imported goods. Instances have come to the notice of the Board that the proper records are not being kept by such dealers and the pre-authentication of the invoices by the central excise officers is still being insisted upon.

2. The matter has been examined. In this connection, your attention is drawn to sub rule (3) of rule 7 of Cenvat Credit Rules, 2002 which provides that the credit of the duty on inputs and capital goods purchased from a first stage or second stage dealer shall be allowed only if the said dealer has maintained records indicating the fact that the inputs or capital goods were supplied from the stock on which the duty was paid by the manufacturer of such goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him. Further, there is no requirement of pre- authentication of the invoices issued by second stage dealers/ dealers of imported goods by the Central Excise officers in the existing provisions.

3. It is therefore clarified that while the maintenance of proper records by the first stage or second stage dealers has been the requirement of the Central Excise Law, the pre-authentication of invoices issued by second stage dealers/ dealers of imported goods by the Central Excise officers has not been provided for.

Yours faithfully,

(Vijay Mohan Jain )
Under Secretary to the Govt. of India

F.No. 267 /67/2002-CX-8

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