Central Excise - Some inputs used in the manufacture of both exempted and dutiable goods - Rule 56A - Problems regarding - Central Excise - 5/87

Central Excise - Some inputs used in the manufacture of both exempted and dutiable goods - Rule 56A - Problems regarding Circular No. 5/87 Dated 7-1-1987 [From F. No. 211/50/86-CX.6] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Some inputs used in the manufacture of both exempted and dutiable goods - Rule 56A - Problems regarding. A reference is invited to Board's instructions F. No. B. 22/3/86-TRU, dated the 10th April, 1986, wherein it has been clarified with regard to Point No. 5 that Modvat credit is not available if the final products are exempt or are chargeable to nil rate of duty. However, where a manufacturer produces along with dutiable final products, final products which would be exempted from duty by a notification (e.g. an end-use notification) and in respect of which it is not reasonably possible to segregate the inputs, the manufacturer may be allowed to take credit of duty paid on all inputs used in the manufacture of the final products, provided that credit of duty paid on the inputs used in such exempted products is debited in the credit account before the removal of such exempted final products. A detailed report on the practice being followed in your respective Collectorate, with regard to the implementation of the aforementioned instructions, may be furnished to the Board urgently.