Cenvat credit & Service Tax

Hello everybody. Can a manufacturer of dutiable excisable goods and provider of taxable output service use the goods so produced by him without paying duty on the said goods for providing taxable output service. Actually both inputs as well as capital goods are manufactured by the same manufacturer who is also the service provider. As there is no exemption notification for clearing these excisable goods from my manufacturing facility to the place of provision of service, we have obtained dealer registration (manufacturer's depot) at all the places where the services are being provided. The inputs and capital goods manufactured by us are cleared to the depot on payment of duty. Subsequently the material is delivered to the place where the service is provided (against a VAT invoice) and an excise invoice is issued by the depot addressed to the factory and we take credit. We are claiming credit based on the first proviso to Rule 3(5) of the CCR, 2004 {Provided that such payment shall not be required to be made where any inputs [or capital goods] are removed outside the premises of the 
provider of output service for providing the output service :} It looks as though there is loss of revenue to the Government (Since effectively the government is not getting the duty on the said inputs and capital goods which were initially cleared on payment of duty but subsequently credit is availed) but we do not find any rule that bars us from taking credit on the goods manufactured by us. Is there a contravention of Rule 4(1) of the CCR {RULE 4. Conditions for allowing CENVAT credit. — (1) The CENVAT credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service :} Should the value of the inputs and capital goods be included for ascertaining the taxable value of the output service even though they are covered by a VAT invoice. Will be grateful to any suggestions or advice in this regard.