2011 (8) TMI 309 - AT - Service Tax

Job work - Business auxiliary service - manufacturing activity - Held that - it is not understood as to how Revenue could have different stand at different points of time. - Inasmuch as we are fully convinced that the impugned order passed by Commissioner (Appeals) is not sustainable at all and nothing more is to be argued, we intend to dispose of the appeal at this stage itself - However, learned DR submits that he wish to seek certain instructions from the Commissioner for which we give him time till 30.8.11 on which date we will take up the appeal for final disposal.

Summary

Issues:
1. Whether the activity of yamming process undertaken by the appellant amounts to manufacture?
2. Whether the said activity is covered under the category of Business Auxiliary service liable to Service Tax?
3. Whether the condition of pre-deposit of Service Tax should be dispensed with?

Analysis:

Issue 1:
The appellant was engaged in the yamming process, affixing the color yoke with the picture tube and adjusting them electronically. The original authority concluded that this activity amounts to manufacture based on the decision of a Larger Bench. However, the revenue appealed against this decision, arguing that yamming does not result in a new product emerging. The Commissioner (Appeals) also held that the process does not amount to manufacture, referencing other judgments. The Tribunal noted the revenue's inconsistent stand over the years and ultimately dispensed with the pre-deposit condition, finding the Commissioner (Appeals) order not sustainable.

Issue 2:
The revenue contended that the yamming process falls under Business Auxiliary service liable to Service Tax. However, the Tribunal's analysis primarily focused on whether the activity amounted to manufacture. The revenue's argument regarding the nature of the process did not hold, as the Tribunal found inconsistencies in the revenue's stance and ultimately decided in favor of the appellant.

Issue 3:
The appellant sought the dispensation of the pre-deposit condition for the Service Tax amount. The Tribunal, after thorough analysis and finding the revenue's arguments lacking consistency and merit, decided to dispense with the pre-deposit condition and penalty. The Tribunal also noted the need for further instructions from the Commissioner before final disposal of the appeal, granting time for the same.

In conclusion, the Tribunal's judgment in this case revolved around the determination of whether the yamming process undertaken by the appellant constituted manufacture and whether it fell under the purview of Business Auxiliary service for Service Tax liability. The Tribunal found the revenue's arguments lacking consistency and ultimately decided in favor of the appellant, dispensing with the pre-deposit condition and penalty while awaiting further instructions for final disposal.