2015 (2) TMI 842 - AT - Service Tax

Business Auxiliary Service - grinding of wheat into wheat products such as Maida, Atta, Suji and Bran for various clients - Held that - t the process would amount to manufacture and no service tax is leviable - Following decision of Jayakrishna Flour Mills (P) Ltd. Vs CCE Madurai 2014 (12) TMI 547 - CESTAT CHENNAI - Decided in favour of assessee.

Summary

Issues: Determination of whether the grinding of wheat into wheat products amounts to "manufacture" or falls under the category of "Business Auxiliary Service."

Analysis:
The judgment involves the consideration of whether the process of grinding wheat into various wheat products, such as Maida, Atta, Suji, and Bran, constitutes "manufacture" or falls under the category of "Business Auxiliary Service." The appellants argued that their process should be classified as "manufacture," while there was a demand to categorize it as a service. The Tribunal referred to a previous case involving Jayakrishna Flour Mills (P) Ltd. vs. CCE Madurai, where the demand was set aside. The Tribunal highlighted the communication from the Board, which confirmed that the grinding of wheat into wheat products amounts to manufacture and, therefore, no service tax levy would arise. This was further supported by similar cases involving M/s. Naga Ltd. Dindigul and M/s. Rajaram Flour Mills, where demands were either set aside or pending consideration based on the Board's clarification.

The Tribunal noted that the Board had accepted that the process of grinding wheat into wheat products should be considered as manufacture, and no service tax should be levied. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The Tribunal disposed of the EH petition and the application for an extension of stay based on the acceptance of the Board's position. The judgment emphasized the Board's instructions and previous decisions, aligning with the view that the process in question amounts to manufacture, leading to the decision to allow the appeal and provide relief accordingly.

In conclusion, the judgment resolved the issue by accepting the Board's position that the grinding of wheat into wheat products constitutes manufacture, thereby setting aside the demand for service tax and allowing the appeal with consequential relief. The decision was based on a thorough examination of relevant communications, previous cases, and the Board's instructions, ensuring consistency in the treatment of similar cases involving the same issue.