2014 (1) TMI 563 - AT - Service Tax

Business Auxiliary Service - Job Work - Whether the activity undertaken by the respondent amounts to manufacture or not - Held that - respondents are receiving job work of Heat Treatment of automobile parts mainly crankshafts from their principal manufacturers M/s. Hind Engg. Works, and M/s. Fairfield Atlas Ltd. After the heat treatment carried out on crank shafts the same were returned back to the principal manufacturers. Both the principal manufacturers have issued certificates to clarify that the crank shafts on which heat treatment process was done by the respondents was received by them and the same were cleared ultimately on payment of appropriate Central Excise duty. In view of this as the activities undertaken by the respondent do not fall under the category of Business Auxiliary Service - Decided against Revenue.

Summary

Issues involved:
Whether the activity undertaken by the respondent amounts to manufacture or not.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI, delivered by Judges S S Kang and P K Jain, addressed the issue of whether the heat treatment activity conducted by the respondent on crankshafts constitutes manufacture. The respondent was involved in heat treatment on crankshafts supplied by various customers, after which the treated crankshafts were returned to the principal manufacturers for further processing. The Revenue contended that the heat treatment fell under Business Auxiliary Service, thus subject to service tax.

Upon reviewing the appeal papers, the Tribunal noted that the respondent received crankshafts for heat treatment mainly from M/s. Hind Engg. Works and M/s. Fairfield Atlas Ltd. The principal manufacturers certified that the crankshafts underwent heat treatment by the respondent and were cleared after payment of Central Excise duty. The Tribunal concluded that the activities did not fall under the category of Business Auxiliary Service. Consequently, the impugned order was upheld, and the appeal filed by the Revenue was dismissed.

The judgment emphasized the distinction between the heat treatment process carried out by the respondent and the classification under Business Auxiliary Service. The certificates provided by the principal manufacturers confirming the receipt and clearance of the treated crankshafts played a crucial role in determining the nature of the activity. The decision rested on the finding that the respondent's actions did not align with the definition of Business Auxiliary Service, leading to the dismissal of the Revenue's appeal.