We have excise registration as a manufacturer. We want to start trading also from the same premises. Do we need to make any change in our registration or get any permission? Do we need to reverse the Cenvat Credit in terms of Rule 6(3)(i) of Cenvat Credit Rules 2004 read with Explanation I to Rule 6 of the said Rules, as trading activity is an exempted service in terms of Section 66D of Finance Act 1994, and we are not maintaining separate accounts for the exempted and non-exempted services?
You do not need any permission to receive, retain or store duty paid goods, either manufactured by you or received from others in the factory premises. You may refer to Pune Commissionerate Trade Notice no. 67/2003 dated December 9, 2003 in this regard. As an unregistered dealer, you do not need any registration or change in your existing registration. However, if you want to issue Cenvatable invoices, you must obtain a separate registration as a dealer. In any case, you have to make sure that your manufactured goods and trading goods do not get mixed up.
So, you must earmark a separate place for storage of trading goods, preferably near the security office at the entry to your premises. You must maintain separate records with separate series for purchase orders, challans and invoices for trading, separate register for receipt and issue of trading goods. It is better to keep the excise department informed of your trading activities. The input services relating to trading activities should be separately accounted for. Otherwise, you run the risk of the department demanding that you discharge your liabilities under Rule 6(3) of Cenvat Credit Rules, 2004.
We have an order from our customer who wants delivery of goods in another state but the goods have to first move to our depot in that state before delivery to the customer. Will the movement to our depot be considered as stock transfer? What is the position if the delivery and billing is done from our depot?
In both the situations that you have mentioned, what occasions/causes the movement of goods from one state to another is the order from the buyer. The transfer to depots is only a matter of convenience before delivering the goods to the buyer. Therefore, it is a case of inter-state sale and not stock transfer. In this connection, you may refer to the Supreme Court judgments in the case of Indian Oil Corporation Ltd. vs Union of India [AIR 1981 SC 446], English Electric Co. of India Ltd. vs Dy. CTO [AIR 1978 SC 19], and Sahney Steel and Press Works Ltd. vs CTO [AIR 1985 SC 1754] on identical facts.
We have ISO 9001 recognition. Can we get double weightage on our deemed exports for status recognition?
No. The double weightage is available only on physical exports for the categories of exports mentioned in format A of the Form ANF 3-A given in Handbook of Procedures, Vol.1.
Business Standard invites readers' SME queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in
