2018 (11) TMI 675 - AT - Service Tax

Job work - Exemption from service tax - Process amounting to manufacture or not - bending, welding, buffing or hard anodizing - After carrying out the said processes, the intermediate product was sent back to the principal manufacturer to carry out further processes on the said product - Held that - Undisputedly the appellant undertaken the process of bending, welding, buffing etc. on the SS Laser Cut Sheet as prescribed under Section 2(f) of Central Excise Act, 1944 sent by the principal manufacturer for undertaking necessary job-work - Besides, the intermediate product was subjected to further processes at the principal manufacturer s end to convert it into finished excisable goods - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the processes undertaken by the appellant amount to 'manufacture' within the definition of the law, justifying the demand for excise duty on the intermediate product.

Analysis:
The appeal was filed against an order passed by the Commissioner of Central Excise (Appeals), Mumbai-I, regarding the demand for excise duty on intermediate products processed by the appellant. The appellant received SS Laser Cut Sheets from the principal manufacturer to carry out processes like bending, welding, buffing, and hard anodizing. The intermediate product was then sent back to the principal manufacturer for further processing to manufacture excisable goods. The appellant argued that the processes undertaken did not result in 'manufacture' as defined by law and had already paid appropriate Service Tax for the processes carried out. The Revenue, represented by the AR, supported the findings of the Commissioner (Appeals).

Upon careful consideration, the Tribunal observed that the appellant had indeed carried out processes on the SS Laser Cut Sheets as prescribed under the Central Excise Act. While the Commissioner (Appeals) had mentioned that the processes resulted in an intermediate product with the essential character of the finished excisable goods, no specific evidence supported this claim. Furthermore, the intermediate product underwent additional processes at the principal manufacturer's facility to become finished excisable goods. Therefore, the Tribunal found no merit in the Commissioner's order and set it aside, allowing the appeal with any consequential relief as per the law.

The Tribunal's decision focused on the lack of concrete evidence supporting the claim that the processes undertaken by the appellant resulted in an intermediate product with the essential character of finished excisable goods. The Tribunal emphasized that the intermediate product underwent further processing at the principal manufacturer's end before becoming finished goods, indicating that the processes carried out by the appellant did not amount to 'manufacture' within the legal definition. Consequently, the Tribunal set aside the Commissioner's order and allowed the appeal, providing relief to the appellant as per the law.