First stage dealer / second stage dealer sales

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CA SANKET GARG (Querist)
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30 July 2016 Hi Friends

I have a query related to First/Second Stage Dealer as below.

As per Central Excise Act, Rules and Procedures, is there any limit/cap on issue of Invoices by a Second Stage Dealer to another Second Stage Dealer. For Example A is the importer and sell goods to B ''a First Stage Dealer'' he further sell to C ''a Second Stage Dealer'' now if C further want to Sell the goods to a person who is also a dealer either First Stage or Second Stage can it be possible and upto what extent this can be possible means D further sell to E and F and so on. Assuming all the Dealers are Registered in Central Excise Act as First/Second Stage Dealer and also registered in VAT/CST Act.

Since there is no specific rules, law etc mentioned in Central Excise Act that what is the limit/cap on issue of invoice.

As per my understanding the above transaction can be done enormous number of times by charging VAT/CST on the Goods Value + Profit Margin and CVD & SAD can be passed on to the manufacturer/ultimate user at the end.

Pls guide me on the above mentioned query. Many thanks in advance.