2017 (9) TMI 1756 - AT - Service Tax

Business auxiliary service - services of chilling of Milk to M/s. Reliance Diary Food Ltd. - period in dispute is 1-4-2006 to 30-9-2010 - Held that - The issue is settled in the case of M/S. SHARMA ICE FACTORY VERSUS CCE. - JAIPUR-I 2014 (6) TMI 493 - CESTAT NEW DELHI , where it was held that chilling of milk is not Business Auxiliary Service covered by Section 65(19)(v) of the Finance Act, 1994 - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Service tax on chilling of milk services provided to a company

Analysis:
The appeal was filed by the assessee-appellants against the Order-in-Original passed by the Commissioner of Central Excise, Jaipur, pertaining to the period from 1-4-2006 to 30-9-2010. During this period, the assessee-appellants were providing chilling services for milk to a specific company, which the Department subjected to Service Tax. The Tribunal referred to a previous case, Sharma Ice Factory v. CCE, Jaipur-I, where it was established that chilling milk to a temperature below 5 degrees Celsius for long-distance transportation does not constitute production or processing of goods. The Tribunal cited the Apex Court's judgment in Commissioner of Income Tax v. N.C. Budharaja & Co., emphasizing that for "production," there must be a change in the raw material subjected to a process. As chilling milk does not bring about any change in the milk itself, it was concluded that it does not amount to production or processing of goods. The Tribunal also noted that the Commissioner (Appeals) had previously held that chilling of milk is not covered under Business Auxiliary Service. Therefore, the impugned order subjecting the chilling services to Service Tax was set aside, and the appeal by the assessee-appellants was allowed based on the precedent and the specific circumstances of the case.