sales to eou and others-cenvat

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Myneni Hima Bindu (Querist)
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05 July 2010 a manufacturing unit is selling its products to an eou and also to others. it is taking cenvat on all inputs used for production of eou sales and also to others. is it allowable to take cenvat credit?

Arjun Chadha

Arjun Chadha (Expert)
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05 July 2010 Yes, in case goods are sold to EOU, SEZ etc without charging excise duty, cenvat credit would still be available under Rule 6(6) of Cenvat Credit Rules, 2004. However, in case of exempt sales not covered under Rule 6(6), proportionate credit would have to be paid. Alternatively, 5% of the value of exempt goods would have to be paid before availing full cenvat credit.