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2023 (4) TMI 972 - AT - Service TaxManufacture or service - activity of job work rendered by the appellant - process of powder coating on job work basis to M/s. Kanchi Fabrications (P) Ltd. - whether the activity rendered by the appellant would amount to manufacturing activity so as to take the same out of the purview of business auxiliary service under Section 65 (19) of the Finance Act, 1994? HELD THAT - The Learned Larger Bench of the CESTAT in the case of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. 2019 (6) TMI 518 - CESTAT NEW DELHI has held that the Service Tax liability of a sub-contractor would never cease, even when the main contractor remits Service Tax. Thus, the contention of the appellant that there was no Service Tax liability on the part of the appellant, being a sub-contractor, would not hold any water in view of the decision of the Learned Larger Bench. Thus, on merits, the appellant has no case. Revenue Neutrality - HELD THAT - The aspect of revenue neutrality need not be perused since the same depends on the facts of each case, as held by the Hon ble Apex Court in the case of M/S. STAR INDUSTRIES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) , RAIGAD 2015 (10) TMI 1288 - SUPREME COURT and the Learned Five-Member Bench of the CESTAT in JAY YUHSHIN LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI 2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI . Appeal dismissed.
Issues Involved:
The appeal was filed against the Order-in-Appeal passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Coimbatore. The main issue to be decided was whether the job work activity of powder coating undertaken by the appellant amounts to manufacturing activity, thereby excluding it from the purview of 'business auxiliary service' under Section 65 (19) of the Finance Act, 1994. Comprehensive details of the judgment for each issue involved: 1. Issue of Manufacturing Activity: The appellant was engaged in powder coating job work for M/s. Kanchi Fabrications (P) Ltd. The Revenue issued a Show Cause Notice proposing to demand Service Tax under 'business auxiliary service' for the period from July 2006 to October 2008. The Order-in-Original confirmed the demands, which led to the appeal. The appellant argued that a similar case before the Mumbai Bench of CESTAT held that powder coating amounted to "manufacture," exempting it from business auxiliary service. However, the Revenue contended that the activity did not create new goods, citing a decision from the Bangalore Bench of CESTAT. 2. Service Tax Liability: The appellant claimed that the main contractor, M/s. KFPL, was liable to pay the Service Tax as they were the main service provider, and the powder coating charges were collected from M/s. BPL Telecom Pvt. Ltd. The appellant, acting as a sub-contractor, argued that the Service Tax liability rested with the main contractor. However, a decision by the Larger Bench of CESTAT held that the sub-contractor remains liable for Service Tax even if the main contractor remits it. 3. Revenue Neutrality: The appellant argued that the tax paid by them could be availed as CENVAT Credit by the main contractor, making the exercise revenue neutral. However, the Tribunal did not delve into this aspect, stating that revenue neutrality depends on the facts of each case, as established by previous court decisions. 4. Final Decision: After considering the arguments and documents, the Tribunal held that the appellant had no case on merits. The appeal was dismissed as the appellant failed to provide grounds for interference, and no other issues were raised before the Bench. In conclusion, the Tribunal dismissed the appeal, emphasizing that the appellant did not establish a case for interference, and the decision was pronounced in open court on 24.04.2023.
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