Cenvat input credit

You have to refer Rule 6 of CENVAT Credit Rules 2004 (go to https://www.cbec.gov.in/excise/new-cenvat-rules.htm), the relevant portion is as below

Rule 6(3)

Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow either of the following options, as applicable to him, namely:-

(i) the manufacturer of goods shall pay an amount equal to 5%. of value of the exempted goods and the provider of output service shall pay an amount equal to 6%. of value of the exempted services;

or

(ii) the manufacturer of goods or the provider of output service shall pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of exempted goods or for provision of exempted services subject to the conditions and procedure specified in sub-rule (3A).

Explanation I.- If the manufacturer of goods or the provider of output service, avails any of the option under this sub-rule, he shall exercise such option for all exempted goods manufactured by him or, as the case may be, all exempted services provided by him, and such option shall not be withdrawn during the remaining part of the financial year.

Explanation II.-For removal of doubt, it is hereby clarified that the credit shall not be allowed on inputs and input services used exclusively for the manufacture of exempted goods or provision of exempted service.

Further refer following article....

/articles/rule-6-of-cenvat-credit-rules-2004-easy-understanding-5058.asp