applicability of Rule 6 of CCR, 2004

[felix ka]

Happy Diwali to all!

We are about to manufacture a dutiable product; 40 % of which is to be removed under the exemption notification 64/95-CE, dated 16-3-95 (exemption to goods supplied for defence and other specified purposes). Please tell me whether 

(1)rule 6 is applicable to us since we are manufacturing no exempted goods

(2)we have to proportionately reverse the cenvat credit of the inputs and input services as per Rule 6 (3A) of CCR, 2004 and

(3) how you had decided the most advantageous option in an occasion where proportionate reversal of cenvat credit was required to be made.

thanks and regards

K A Felix

AI Summary

Debate on Rule 6 CCR, 2004: Does Proportionate Reversal of Cenvat Credit Apply to Exempted Defense Products? A discussion on the applicability of Rule 6 of the Cenvat Credit Rules (CCR), 2004, focused on a scenario where 40% of a manufactured dutiable product is removed under an exemption notification for defense purposes. The main query was whether Rule 6 applies and if proportionate reversal of Cenvat credit is required. Various participants advised that Rule 6 does apply, suggesting options like maintaining separate accounts, reversing credit proportionately, or paying 5% on exempted products. It was noted that inputs exclusively used for non-defense products do not require credit reversal.