Cenvat credit of input service tax paid on exempted and taxable excisable goods

[soniya agarwal]

Dear Madam/ Sir,

I have an urgent query with regard to cenvat credit of input service tax paid on exempted and taxable  excisable goods in which approx  95% of goods is exempted . Can this cenvat credit of  input service tax paid be utilised for payment of output service tax.

Please reply in details giving reference of section , case laws , rules of cenvat credit since I have to be detailed in explaining myself to CBEC for show cause notice by CBEC to my client .

An early reply will be highly appreciated 

With Regards

SONIYA AGARWAL

[CA Galaxy]

NO credit allowed here. Check rule 6 iii where you have both exempted n taxable goods. Then prop credit only allowed.
I am not sure for rule, either it is 6 iii or iv.

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