2010 (1) TMI 247 - AT - Service Tax

Business Auxiliary Service- whether the activity of job work of manufacturing alcohol based perfumes for various input-suppliers amounts to manufacture under Section 2(f) of the Central Excise Act, 1944 or is covered under the purview of Business Auxiliary Service? Held that-In the light of the decision of Rubicon Formulations Pvt. Ltd. vs. CCE & Cus, Aurangabad 2010 -TMI - 76121 - CESTAT, MUMBAI, and held that the said activity taken over by the appellants amount to manufacture and the appellants are not liable to pay any service tax on the said activity under Business Auxiliary Service. Accordingly, we set aside the impugned order. Appeals are allowed with consequential relief, if any. Cross Objection is also disposed off in the above term.

Summary

Issues involved:
Whether job work of manufacturing alcohol-based perfumes amounts to manufacture under Section 2(f) of the Central Excise Act, 1944 or falls under the purview of 'Business Auxiliary Service'.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai dealt with the issue of whether the activity of job work involving the manufacturing of alcohol-based perfumes for various input suppliers constitutes manufacture under Section 2(f) of the Central Excise Act, 1944, or if it should be classified as 'Business Auxiliary Service'. The appellant argued that a previous decision by the Tribunal in the case of Rubicon Formulations Pvt. Ltd. had established that such activities amounted to manufacture under the Act, citing a relevant Board's Circular as support. The learned Advocate for the appellant contended that the said legal position was in line with the Circular, which further supported their position.

The learned SDR also confirmed the appellant's position during the proceedings. The Tribunal, after considering the submissions made by both parties, observed that the issue at hand was squarely covered by the precedent set in the Rubicon Formulations Pvt. Ltd. case. Consequently, the Tribunal held that the activity undertaken by the appellants indeed amounted to manufacture and, therefore, they were not liable to pay any service tax under the category of Business Auxiliary Service. Consequently, the impugned order was set aside, and the appeals were allowed with any consequential relief. The Cross Objection was also disposed of accordingly.

The judgment was pronounced in court by Shri B.S.V. Murthy, Member (Technical), and Shri Ashok Jindal, Member (Judicial), signifying the unanimous decision reached by the Tribunal in favor of the appellants based on the established legal precedents and interpretations of relevant provisions of the Central Excise Act, 1944.