2011 (3) TMI 665

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..... ed in this matter is of interpretation of the statute, hence it is fit case to invoke Section 80 of Finance Act to waive penalty - Decided in favour of the assessee
S/Shri Ashok Jindal, Mathew John, JJ. REPRESENTED BY : Shri Ravi Raghvan, Advocate, for the Appellant. Shri Sonal Bajaj, DR, for the Respondent. [Order per : Ashok Jindal, Member (J)]. - This appeal is filed by the appellants against the order of confirmation of Service Tax liability on business auxiliary services along with penalty. 2. The brief facts of the case are that the appellants have undertaken the process of cutting paper into sheets. The demand along with interest on Service Tax was confirmed on the ground that the appellants are producing goods on behal .....

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..... bility, no penalties are warranted in this case. 4. On the other hand, the ld. DR drew our attention to the definition of business auxiliary services under Section 65(19) of the Finance Act wherein clause (v) reads as under :- "Production or processing of goods for, or on behalf of the client" 5. He submitted that as admitted the activity undertaken by the appellants does not amount to manufacture; but cutting paper into sizes is nothing but production only. He further submitted that if production/manufacture are the same then this clause of the definition will become redundant in view of the last part of the definition excluding any activity that amounts to "manufacture". Hence the appellants are liable to pay Service Tax on t .....

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..... hedule to the Central Excise Tariff Act, 1985 as amounting to manufacture". 12A Clause (f) gives an inclusive definition of the term 'manufacture'. According to the dictionary, the term 'manufacture' means a process which results in an alteration of change in the goods which are subjected to the process of manufacturing leading to the production of a commercially new article. In determining what constitutes 'manufacture' no hard and fast rule can be applied and each case must be decided on its own facts having regard to the context in which the term is used in the provision under consideration. 16. In Black's Law Dictionary (5th Edition), the term "production" has been defined as under :- "Production. Process or act of producin .....

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