Hi DB
Since Tax is not applicable on the Final Saleable material, you wont be able to take benefit of the excise duty paid on the Input materials too
So, you will create your tax codes as "Non-deductibe" so that Excise duty is included in the Moving Average Price of the Material itself
That would provide you a prompt inventory valuation and carry the same into Product Cost
You can always develop a Z report to report the taxes on input materials, the way you want to report them
Ajay M
PS: Request you to close your threads once resolved. Refer this thread on how to do this. http://scn.sap.com/community/support/blog/2013/04/03/how-to-close-a-discussion-and-why
Your few seconds, after the issue is resolved, would leave a better SCN for you and everyone