Cenvat credit queries

FSD and SSD are just like normal dealers but instead of charging excise on sale value they pass on Cenvat charged to them on purchase for e.g. Purchase value 100/- excise 10 so sale value 120 but excise will be 10 only

Thanks neeraj , I am convinced . pls also solve my second query

Q-2 As per Rule 6(4) of CCR,2004 , no credit of duty paid on capital goods can be availed if the same are used exclusively for manufacturing of exemtped  goods other than final products which are eligible for SSI exemption 

the concept is here to bar the input credit by any means , on inputs or capital goods by exempted goods producers, however the SSI catagory does not means that the goods are exempted, but the unit is not paying duty upto 150 Lacs as a pre condition, so its taxable by CETA and under SSI notification 8/2003 its not paying duty only, ( after SSI exemption he is likely to pay duty) hence the cenvat credit on capital goods allowed for them.

however under the shadow of this notification , if any 100% exempted goods producer want to avail the input credit on capital goods, he is barred to do so, coz his goods are neither taxable at any stage under CETA, and he will not pay tax at anytime.