2011 (8) TMI 810 - AT - Service Tax

Demand - Business Auxiliary Services - Job work - yamming process i.e. affixing the colour yoke with the picture tube by way of yamming process and then adjusting them electronically to keep proper light rays on screen. - it was the revenue s own stand before the Larger Bench that yamming process amounts to manufacturer - Decided in favor of the assessee

Summary

Issues:
1. Confirmation of Service Tax liability against the appellant for providing Business Auxiliary Services without discharging service tax.
2. Determination of whether the yamming process amounts to manufacture and is covered under Business Auxiliary Services for Service Tax liability.
3. Appeal against the original authority's order by the revenue questioning the manufacturing aspect of the yamming process.
4. Commissioner (Appeals) decision on whether the yamming process constitutes manufacture and attracts service tax liability.
5. Revenue's proposal to file a Special Leave Petition (SLP) before the Supreme Court challenging the yamming process as manufacture.

Issue 1:
The Appellate Tribunal confirmed that the appellant provided services under Business Auxiliary Services without discharging the service tax liability, leading to a demand of Rs. 63,068 for the period 2004-08.

Issue 2:
The Tribunal analyzed the yamming process undertaken by the appellant, involving affixing the color yoke with the picture tube and adjusting them electronically. The Tribunal referred to the Weston Electronics Ltd. case where it was held that the yamming process amounts to manufacture. The original authority dropped the demand based on this decision.

Issue 3:
The revenue appealed the original authority's decision, arguing that the yamming process does not result in a new product emerging and, therefore, does not constitute manufacturing. The Commissioner (Appeals) upheld the revenue's appeal, stating that the yamming process does not amount to manufacture, leading to the appellant's service tax liability.

Issue 4:
The Tribunal noted that the revenue proposed to file an SLP before the Supreme Court challenging the manufacturing aspect of the yamming process, despite no appeal filed against the Larger Bench decision or its reversal by a higher forum. The Tribunal found the revenue's inconsistent stance perplexing, especially considering its previous position supporting the manufacturing classification of the yamming process.

Issue 5:
In conclusion, the Tribunal held that the yamming process had been definitively classified as manufacturing by the Larger Bench decision in the Weston Electronics Ltd. case. Therefore, the revenue's contrary argument was rejected, and the service tax confirmation against the appellant was deemed unjustified. The Commissioner (Appeals) decision was set aside, restoring the original order dropping the demand.

This detailed analysis of the judgment showcases the Tribunal's thorough examination of the manufacturing aspect of the yamming process and its implications on the service tax liability of the appellant, ultimately upholding the original authority's decision in favor of the appellant.