9911796707
TMI Blog2013 (5) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... c Corporation India Pvt. Ltd. Job work consists of electroplating of goods supplied by M/s. Tyco Electronic with silver or gold. The appellant was availing the benefit of Notification No.8/2005 on the ground that they are engaged in the manufacture of these goods and they were supplying the same to M/s. Tyco Electronic. However, the department took a view that the appellant should have discharged service tax on the electroplating cost including the cost of electroplating materials used by the appellant. After completion of proceedings, service tax of Rs.2,82,39,803/- with interest for the period from 1.11.2007 to 31.5.2011 has been demanded and penalty has also been imposed under Finance Act, 1994. 2. While the application for waiver of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has to be classified as a service under business auxiliary service and service tax should be levied is not correct. He relies upon the decision of this Tribunal in the case of Modison Metal Refiners vs. Commissioner: 1996 (88) E.L.T. 292 (Tribunal) and submits that in this decision, it was held that electroplating of electrical contacts on job work basis is a process incidental or ancillary to the completion of manufacture and amounts to manufacture. He relies on the section- note 6 to Section 16 of the Schedule to the Central Excise Tariff Act to submit that conversion of an article which is incomplete or unfinished but having the essential character of the complete or finished article, shall amount to manufacture and also he submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes the observation of the Commissioner that appellant is not eligible for the benefit of Notification No.8/2005 since the products supplied to 100% EOU after undergoing process are exempt from payment of duty. 5.1 We have considered the submissions made by both the sides. First of all, we take note of the fact that according to section-note to Section 16 of the Central Excise Tariff. 6. In respect of goods covered by this Section, conversion of an article which is incomplete or unfinished but having the essential character of the complete or finished article (including blank, that is an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xclusion in the definition of business auxiliary service which provides that if the process amounts to manufacture, no service tax would be liable to be paid. 5.3 Even though the issue can be decided on the sole ground whether the process amounts to manufacture or not, we would like to consider applicability of the second ground viz., exemption under Notification No.8/2005-ST also, which provides for exemption from service tax to the goods produced on behalf of the client provided such exemption is allowed only when such goods are used by the principal manufacturer or further manufacture of other goods on which appropriate duty of excise is payable. The Notification also defines appropriate duty of excise. According to the Notification, ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
