TaxTMI 
TaxTMI 
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?
Trading or removal as such
23 Jun 2015 
2 Replies 
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Removal as such: manufacturers must reverse cenvat when goods are disposed as such rather than treated as trading.
Distinction between removal as such and trading depends on the nature and destination of goods: returns to the same unit or sale of unmanufactured or unsatisfactory raw materials constitute removal as such, while routine resale to third parties is trading. Separate registration and separate accounts must be maintained for manufacturer, dealer and importer functions. Where cenvat credit was availed on goods treated as removal as such, the cenvat must be reversed under the applicable cenvat credit reversal rule. (AI Summary)
Distinction between removal as such and trading depends on the nature and destination of goods: returns to the same unit or sale of unmanufactured or unsatisfactory raw materials constitute removal as such, while routine resale to third parties is trading. Separate registration and separate accounts must be maintained for manufacturer, dealer and importer functions. Where cenvat credit was availed on goods treated as removal as such, the cenvat must be reversed under the applicable cenvat credit reversal rule. (AI Summary)