exempted material

[sukhvinder singh]

Dear Sir ,

Please clear , a company manufactureing  exempted goods as well as dutiable goods , some inputs are commenlly used  and some are exclusively used in  exempted goods ,my question is whether we requier to pay 5% duty on the sale value  of the exempted good excluding all taxes or   reverse the credit of  inputs exclusively used in exempted goods  or both .  

Thanks

AI Summary

Cenvat credit allocation: either segregate accounts, pay a value based amount, or proportionately reverse credit for exempted outputs.
Rule 6 requires that inputs exclusively used in manufacture of exempted goods are ineligible for Cenvat credit. For common inputs, the manufacturer must either maintain separate accounts, pay a value-based amount for exempted clearances, or perform proportionate reversal of credit with provisional monthly and final annual adjustments. The chosen option applies to all exempted goods and cannot be withdrawn during the remainder of the financial year.