2012 (10) TMI 684 - AT - Service Tax

Business Auxiliary Service - denial of Notification No.8/2005-ST - period March 2005 to December 2008 - Held that - Considering the assessee s submission that as the goods which are powder coated by the appellant as a job worker and sent back to the principal who further utilizes the same in the manufacturing of final product, on which Excise duty is payable, all these facts as reported by the Superintendent of Central Excise, were not before the first appellate authority. Remand the matter back to the first appellate authority to reconsider the issue afresh.

Summary

Issues:
Service Tax liability on the appellant for powder coating on metal components as a job worker under Business Auxiliary Service category.

Analysis:
The appeal pertains to the Service Tax liability of the appellant for the period March 2005 to December 2008. The issue revolves around whether the appellant is liable to discharge Service Tax under the Business Auxiliary Service category for powder coating on metal components as a job worker. The appellant argues that the benefit of Notification No.8/2005-ST should be considered by the first appellate authority. They contend that the goods powder coated by them as a job worker and sent back to the principal are further utilized in the manufacturing of final products, on which Excise duty is payable. The appellant asserts that this crucial aspect was not taken into account by the first appellate authority, despite requesting a report from the jurisdictional range Superintendent, which they obtained under the RTI Act and presented before the Tribunal.

The Departmental Representative (D.R.) reiterates the findings of the first appellate authority but requests for the matter to be remanded back to reconsider the issue. Upon careful consideration of the submissions from both sides, the Tribunal notes that the crux of the appeal lies in understanding the factual scenario concerning the consumption of powder coated material cleared by the appellant as a job worker to the principal. The Tribunal emphasizes the need to determine whether the principals have indeed utilized these materials in the manufacturing of finished goods on which Excise duty is either paid or payable. Notably, all these crucial facts, as reported by the Superintendent of Central Excise, were not presented before the first appellate authority.

Consequently, the Tribunal decides to set aside the impugned order and remand the matter back to the first appellate authority for a fresh consideration of the issue. The Tribunal emphasizes the importance of adhering to the principles of natural justice in the reconsideration process, without expressing any opinion on the merits of the case. The decision to remand the matter back to the first appellate authority underscores the necessity for a detailed factual examination to ensure a just and informed determination of the Service Tax liability concerning the appellant's activities as a job worker providing powder coating services on metal components.