Trading or removal as such

[Dalia Felix]

Hai, how can we distinguish between removal as such and trading by a manufacturer in excise? What are the criteria used? Any clarification issued by CBEC in this regard?

[Mehul Pandya]

Separate Registration required for manufacturer, Dealer and Importer. Normal Trading activity should be followed under Dealer / Importer Registration. Where as raw material purchased for manufacturing purpose is not up to the mark or purchase return or sold to any other buyer will be called as Removed As such on which cenvat credit availed. Hence cenvat should be reversed under Rule 3(5) of CCR Rules. You may also refer Rule - 9 of Central Excise Rules, 2002.

[Arun Kumar Singh]

You should maintain the separate account for as such removal and trading activity. As such removal of goods will be return to the same unit and trading activity is different from as such removal.

AI Summary

Clarification on 'Removal as Such' vs. Trading: Separate Registration Needed; Cenvat Credit Reversal per Rule 3(5) CCR Rules A forum participant inquired about distinguishing between 'removal as such' and trading by a manufacturer in the context of central excise. One response clarified that separate registration is required for manufacturers, dealers, and importers, with trading activities falling under dealer/importer registration. If raw materials are returned or sold due to unsuitability, it is considered 'removal as such,' requiring cenvat credit reversal under Rule 3(5) of CCR Rules. Another response advised maintaining separate accounts for 'as such' removal and trading, noting that 'as such' removal involves returning goods to the same unit, unlike trading.