Excise duty Exemption under Notification 10/97

[Vivek anandhan]

Dear Experts

We are a manufacture of Generators, we have received an order from Research Institute for supply of Generator under Excise duty exemption. Customer has given exemption certificate obtained from Department of Atomic Energy. Whether we can supply Generator set under this notification. Also whether we need to give reversal of CENVAT at 6% for this exempted sale under Cenvat credit rule..

AI Summary

Cenvat reversal obligation requires a prescribed percentage of exempted supply value under rule 6(3)(i), not recoverable from customer.
Supply under Notification 10/97 to a qualifying research institute is exempt from excise, but manufacturers must reverse from Cenvat an amount equal to a prescribed percentage of the value of exempted goods where separate accounts for dutiable and exempted goods are not maintained; the reversal is an amount (not duty), non-cenvatable, a cost to the manufacturer, may be shown on invoice per trade guidance, and the applicable percentage is that fixed by current notification.