2023 (10) TMI 229 - AT - Service Tax

Levy of service tax or not - Job-work - Sterilizing Services - eligibility for exemption Notification No.08/2005-ST - HELD THAT - The very same activity on job work basis, in the case of appellant itself for the period prior to 01.07.2012 was considered by this Tribunal in UNIVERSAL MEDICAP LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA 2023 (6) TMI 788 - CESTAT AHMEDABAD , wherein the Tribunal has extended the benefit of 08/2005-ST to the job work activity of the appellant for the period prior to 01.07.2012. In the present case the Learned Commissioner (Appeals) has extended the benefit of Notification 25/2012-ST for the period after 01.07.2012. However, for the previous period Notification 08/2005-ST was denied. Since, the issue relates to Notification 08/2005-ST has been considered in the aforesaid decision by this Tribunal, The issue is no longer res-integra. Hence, following the decision, the appellant is not liable to pay service Tax on the job work activity carried out by them. Therefore, the demand for the period prior to 01.07.2012 is also not sustainable. Appeal allowed.

Summary

Issues:
The issues involved in the judgment are the eligibility of exemption Notification No.08/2005-ST for the activity of sterilizing goods on a job-work basis, and the liability to pay service tax on such transactions.

Eligibility of Exemption Notification No.08/2005-ST:
The appellant was engaged in the process of sterilizing goods on a job-work basis. The appellant argued that they complied with the conditions and criteria laid down under exemption Notification No. 8/2005. The Revenue contended that the activity fell under Business Auxiliary Service and denied exemption under the notification. The Tribunal analyzed the notification, which required that goods produced on behalf of the client should be returned back for further use in manufacturing. The Tribunal found that the appellant processed semi-finished goods supplied by the client, making them eligible for the exemption. The Revenue's argument that the goods should be used in further manufacturing by the client was deemed incorrect, as the job-worker is allowed to complete the product without further manufacturing by the client.

Benefit of Previous Tribunal Decision:
The Tribunal referred to a previous decision where the benefit of Notification 08/2005-ST was extended to the appellant's job work activity for the period prior to 01.07.2012. The Tribunal noted that the same issue had been considered previously, and following that decision, the appellant was not liable to pay service tax on the job work activity. Therefore, the demand for the period prior to 01.07.2012 was also deemed unsustainable. The impugned order was modified accordingly, and the appeals were allowed.

Conclusion:
The Tribunal concluded that the appellant was eligible for exemption under Notification No.08/2005-ST for the activity of sterilizing goods on a job-work basis. The demand for service tax on such transactions was deemed unsustainable based on the interpretation of the notification and previous decisions. The impugned order was set aside, and the appeals were allowed.