Order Date – 04 January 2023

Parties: Black Box Limited Vs Commissioner of Central Excise & ST, Ahmedabad-iii

Facts – 

• The Appellant, Black Box Limited, was issued show cause notice dated 07.07.2008 alleging that spares/ components are removed as such to EOUs under CT-3 certificates without paying/reversing the Cenvat Credit. Cenvat Credit was also availed in respect of services received from Foreign Services providers under invalid documents, and Cenvat Credit in respect of input services received by their Regional/Branch offices/service centers were wrongly availed without having centralized registration.
• The adjudicating authority vide impugned order, confirmed the demands of Rs. 2,23,44,289/- out of total demand of Rs. 7,12,73,240/- and rest of demand are dropped. 

Issue – 

• Whether the appellant has to reverse the cenvat credit?

Order – 

• The Tribunal observed that the technical testing process were undertaken on the imported spares/ components within the factory, and cannot be considered as cleared “as such”. These goods are cleared only after carrying out tests which by themselves may not amount to manufacture but are necessary to complete the manufacturing process of the imported goods and EPBAX. In such a view in the matter there is no justification for demand of an amount in terms of Rule 3(5) of the Cenvat Credit Rules on the clearances made to 100% EOU.
• Further, relied on the decision of Aroma Chemicals Vs. Commissioner (Appeals-I), C.Ex., Meerut (supra) 2018 (363) E.L.T. 1148 (Tri. - All.) wherein it was observed that if the Cenvat credit is availed on inputs and if the same are cleared to 100% EOU as provided under sub-rule (6) of Rule 6 of Cenvat Credit Rules, 2004, Cenvat credit of duty paid on such inputs cannot be denied. 
• As regard to cenvat credit availed on services received from Foreign Services providers, since the period of dispute is prior to 01.07.2012, the case of the appellant will be governed under the provisions of unamended Rule 3(4) ibid and in absence of specific restrictions contained therein for non-utilisation of Cenvat credit by the service recipient, the benefit of the existence rule is available to the assessee for utilization of Cenvat credit for payment of service tax under reverse charge mechanism.
• As regards admissibility of CENVAT credit of service tax paid in respect of services received in the branches or invoices in the name of the branches, credit cannot be denied on the ground that the appellant did not have centralized registration during the period. Non-obtaining the centralized registration at the best is a technical issue, since there is a substantive adherence of law in view of the fact that service tax has been apparently paid on the basis of centralized registration therefore credit could have been taken in the centrally registered office.
• Hence the appeal is allowed.