CENVAT credit adjustment: manufacturers must attribute and pay credit for inputs used in exempted goods under prescribed procedure.

Obligation to adjust and pay CENVAT credit applies where inputs are used in manufacture of exempted or non-excisable final products. Manufacturers exclusively making exempted goods forfeit input credit. Manufacturers of both exempted and non-exempted goods must either pay a prescribed proportion of exempted goods' value or follow an attribution procedure calculating ineligible, eligible and common credit, with monthly provisional payments, interest on unpaid amounts, annual reconciliation and reporting to the superintendent.

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