Manufacture of excisable and non excisable goods - useing phinolic resin

[KIRTIKUMAR PUROHIT]

We are manufacturing Bagas Prelam Partical Board which is exempted from excise duty. we are useing phinolic resin as input for manufacture bagas board, now my question is that whether if we preper resin in our primises & all the input which we used for resin i.e. phenol, mehtanol, melamine, DGE DBP etc. we forego excise duty from the same and we are kept saperate record for Excisable & non excisable Input and Final Products however Department issue us SCN for demand of duty on Resin. in our case when we keep saperate record for both what impact of such Show Cause Notice?? please reply and help me in such burning issue.

AI Summary

Separate records for excisable inputs can rebut excise demands if Cenvat is not availed or captive use is shown.
Where an excisable intermediate (phenolic resin) is manufactured alongside an exempt final product, maintain separate records for excisable and exempt inputs and outputs, and either refrain from availing Cenvat on resin inputs or show that resin is wholly used as captive consumption; if resin is sold, duty must be charged and recorded. A show cause notice disputing non duty on in house resin is a factual issue-full records and evidence submitted in reply can lead to the demand being set aside.