Rule 7

7. Documents and accounts.-

(1) The CENVAT credit shall be taken by the manufacturer on the basis of any of the following documents, namely :-

(a) an invoice issued by-


(i) a manufacturer for clearance of -


(I) inputs or capital goods from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer;

(II) inputs or capital goods as such;
(ii) an importer;

(iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002;

(iv) a first stage dealer or a second stage dealer, in terms of the provisions of Central Excise Rules, 2002;
(b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty of customs leviable under section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Act or of the Customs Act, 1962 or the rules made thereunder with intent to evade payment of duty.

Explanation.- For removal of doubts, it is clarified that supplementary invoice shall also include Challan or any other similar document evidencing payment of additional amount of additional duty of customs leviable under section 3 of the Customs Tariff Act;

(c) a bill of entry;

(d) a certificate issued by an appraiser of customs in respect of goods imported through a Foreign Post Office.

[OMITTED -
(e) any of the documents referred to in clauses (a) to (d), issued in the name of a person ,-


(a) involved in purchase and sale of yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60, or made up textile articles falling under Chapter 63 of First Schedule to the Tariff Act; or

(b) undertaking activities pertaining to manufacture of yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60, readymade garments falling under Chapter 61 or 62 or made up textile articles falling under Chapter 63 of First Schedule to the Tariff Act, which is either fully exempt from duties of excise or are chargeable to "Nil" rate of duty or the said activity not amounting to manufacture,

being endorsed in full for the entire consignment covered under the said document by the said person to any other manufacturer, producer, first stage dealer or second stage dealer. ]

(Above Clause (e) has been omitted vide Ntf. No. 12/2004-CE(N.T.), Dt. 09/07/2004)

Explanation:- For the removal of doubt, it is clarified that the manufacturer, producer, first stage dealer or second stage dealer, as the case may be, in whose name such endorsement has been made, shall not be denied the credit merely on the grounds that the description of the goods mentioned in such an endorsed document has undergone a change on account of such an activity been undertaken by such person, as referred to in sub clause (ii) of this clause on the said goods.;

(Clause (e) has been substituted vide NTF. NO. 28/2003-CE(N.T.), DT. 01/04/2003)

[OLD -
(e) any of the document referred to in clauses (a) to (d) issued in the name of a person undertaking activities pertaining to manufacture of yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60, readymade garments falling under Chapter 61 or 62 or made up textile articles falling under Chapter 63 of First Schedule to the Tariff Act [OLD - yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60 or readymade garments falling under Chapter 61 or 62 of First Schedule to the Tariff Act ], which is either fully exempt from duties of excise or are chargeable to "Nil" rate of duty or the said activity not being amounting to manufacture, being endorsed by the said person to any other manufacturer, producer, first stage dealer or second stage dealer.

(In above clause (e) bold words and figures has been substituted vide NTF. NO. 28/2003-CE(N.T.), DT. 01/04/2003)

Explanation:- For the removal of doubt, it is clarified that the manufacturer, producer, first stage dealer or second stage dealer, as the case may be, in whose name such endorsement has been made, shall not be denied the credit merely on the grounds that the description of the goods mentioned in such an endorsed document has undergone a change on account of such an activity been undertaken by such person on the said goods.

(Clause (e) has been inserted vide NTF. NO. 25/2003-CE(N.T.), DT. 25/03/2003)]

(f) a challan, referred to in rule 8A.

(Clause (f) has been inserted vide Ntf. No. 54/2003-CE(N.T.), Dt. 09/06/2003)

(1A) CENVAT credit under rule 3 shall not be denied on the grounds that any of the documents mentioned in sub-rule (1) does not contain all the particulars required to be contained therein under these rules, if such document contains details of payment of duty, description of the goods, assessable value, name and address of the factory or warehouse:

Provided that the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of a manufacturer intending to take CENVAT credit is satisfied that duty due on the inputs has been paid and such inputs have actually been used or are to be used in the manufacture of final products, and such Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise shall record the reasons for not denying the credit in each case.

(Above Sub-rule (1A) has been inserted vide Ntf. No. 13/2003-CE(NT), DT. 01/03/2003)

(2) The manufacturer or producer taking CENVAT credit on inputs or capital goods shall take all reasonable steps to ensure that the inputs or capital goods in respect of which he has taken the CENVAT credit are goods on which the appropriate duty of excise as indicated in the documents accompanying the goods, has been paid.

Explanation.- The manufacturer or producer taking CENVAT credit on inputs or capital goods received by him shall be deemed to have taken reasonable steps if he satisfies himself about the identity and address of the manufacturer or supplier, as the case may be, issuing the documents specified in rule 7, evidencing the payment of excise duty or the additional duty of customs, as the case may be, either-

(a) from his personal knowledge; or
(b) on the strength of a certificate given by a person with whose handwriting or signature he is familiar; or
(c) on the strength of a certificate issued to the manufacturer or the supplier, as the case may be, by the Superintendent of Central Excise within whose jurisdiction such manufacturer has his factory or the supplier has his place of business, and where the identity and address of the manufacturer or the supplier is satisfied on the strength of a certificate, the manufacturer or producer taking CENVAT credit shall retain such certificate for production before the Central Excise Officer on demand.

(3) The CENVAT credit in respect of inputs or capital goods purchased from a first stage or second stage dealer shall be allowed only if such dealer has maintained records indicating the fact that the inputs or capital goods were supplied from the stock on which duty was paid by the producer of such inputs or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him.

(4) The manufacturer of final products shall maintain proper records for the receipt, disposal, consumption and inventory of the inputs and capital goods in which the relevant information regarding the value, duty paid, the person from whom the inputs or capital goods have been procured [OLD - purchased ] is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer taking such credit.

(In Sub-rule (4) Bold word has been substituted vide Ntf. No. 13/2003-CE(NT), DT. 01/03/2003)

(5) The manufacturer of final products shall submit within ten days from the close of each month to the Superintendent of Central Excise, a monthly return in the form specified, by notification, by the Board:

Provided that where a manufacturer is availing exemption under a notification based on the value or quantity of clearances in a financial year, he shall file a quarterly return in the form specified by notification by the Board within twenty days after the close of the quarter to which the return relates.

(Above sub-rule (5) has been substituted vide Ntf. No. 70/2003-CE(N.T.), Dt. 15/09/2003)

[OLD -
(5) The manufacturer of final products shall submit within ten days from the close of each month to the Superintendent of Central Excise, a monthly return in the form-1 annexed to these rules.

Explanation.- In respect of a manufacturer availing of any exemption based on the value or quantity of clearances in a financial year, the provisions of this sub-rule shall have effect in that financial year as if for the expression “month”, the expression “quarter” was substituted. ]

(6) A first stage or a second stage dealer, as the case may be, shall submit within fifteen days from the close of each quarter of a year to the Superintendent of Central Excise, a return in the form specified by notification by the Board.

(Above sub-rule (6) has been substituted vide Ntf. No. 70/2003-CE(N.T.), Dt. 15/09/2003)

[OLD -
(6) A first stage or a second stage dealer, as the case may be, shall submit within fifteen days from the close of each quarter of a year to the Superintendent of Central Excise, a return in form-2 annexed to these rules.

(In sub-rule (5) bold word has been substituted and sub-rule (6) added vide NTF. NO. 18/2003-CE(N.T.), DT. 13/03/2003 for further amendments) ]