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TMI Blog2013 (9) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation, that is 1-10-2009 to 14-11-2010, involving service tax demand of Rs. 49,18,625/- and wanted to contest only the demand beyond the normal period of limitation. Initially the Tribunal refused permission for such partial withdrawal vide Misc. Order No. ST/M/244/2012-Cus., dated 13-6-2012. The appellant filed a writ petition before the Hon'ble Allahabad High Court vide Writ Tax Number 973 of 2012. The High Court vide order dated 14-8-2012 set aside the said order and ordered that Tribunal should take note of Section 86(4) of Finance Act, 1994 and pass appropriate order on merits. 3. The Appellant entered into an agreement with Jubilant Life Sciences Ltd. ("JLSL" for short) under which they agreed to manufacture excisable goods from raw materials to be supplied by them. The terms of the agreement entered into between JLSL and the appellant clearly show that the appellant was processing goods for JLSL and the manufacturing activity was entirety carried out by the appellant in the presence of the managerial staff of JLSL. All the materials required for carrying out the processing activity were supplied by JLSL. The products once processed were either supplied to JLS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security;] Section 65(105)(zzzq). "taxable service" means any service provided or to be provided, to any person, by any other person, in relation to support services of business or commerce, in any manner; 7. The Authorized Representative for the appellant submits that the activity that was done by appellant (earlier known as PMSL) amounted to manufacture of excisable goods and excise duty on such goods was being paid by Jubilant Life Sciences Ltd. It is contested that manufacturing of excisable goods was not subjected to service tax. Such activity was specifically mentioned in "Business Auxiliary Services" defined under Section 65(19) and excluded from the scope of service tax levy and therefore it is argued that it could not be subjected to tax under the head for "Business Support Services" introduced with effect from 1-5-2008 under Section 65(104c). 8. The appellants also argue that no suppression of facts can be alleged against the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... testing of the products at its facilities, on behalf of the JUBILANT, of such specifications as specified by JUBILANT from time to time. The processing of the products will be carried out under supervision and control of JUBILANT and in accordance with the manufacturing process, instructions, supervision & control of JUBILANT from time to time. The following are included in the scope of manufacturing, packing and testing : (i) Unloading and storage of raw materials, packaging materials and any other materials required to manufacture the products. The testing of raw materials will be done by PMSL in presence of manager/officer of Jubilant in accordance with the specifications provided by JUBILANT. (ii) Storing and loading of finished goods and dispatch as per the instructions given by the JUBILANT and under direct supervision & control of Manager/Officer of Jubilant. (iii) Assistance to JUBILANT to compile accounts regarding receipt, consumption and inventory of raw materials, packaging materials, in process materials and finished goods and comply with the process of Central Excise Act, 1944 and Rules made thereunder including registration of the premises in the name of Jubilant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 4.1 PMSL will produce and supply the finished goods to JUBILANT' depot or directly to the customers of JUBILANT as per the instructions given by JUBILANT from time to time and under the supervision and control of manager officer of JUBILANT. 4.2 JUBILANT will have the right to disposal of the scrap of packing and raw materials, intermediates and the products arising during the course of manufacturing and PMSL shall assist in maintaining the records for generation and sale of such scrap. Payment 5.1 PMSL will be paid the job work charges for processing, packing and testing of finished products for JUBILANT at the rates mutually agreed from time-to-time after deducting tax at source, if any, under Income tax Act/Rules. Jubilant will avail CENVAT credit of excise duty paid on all the inputs and input services used for manufacture of the products and will be responsible for payment of excise duty on the products. 5.2 PMSL will provide earmarked space and communication facilities to JUBILANT's personnel for coordination of purchases, logistics, supervision of storage and consumption of raw, packing and other process materials, production planning and supervision, and quality cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn as PMSL) to JLSL. While considering this issue another issue that arises is whether there can be two manufacturers for the same goods. In the instant case JLSL claimed to be the manufacturer and the claim was accepted by Central Excise Department and JLSL was paying excise duty. In such circumstances is there any scope for PMSL to claim that their activity should also be considered as manufacturing activity in respect of the same goods? 15. We have perused the contract dated 1-4-2007 between the two parties. It is seen that as per the contract JLSL was supplying all the raw materials required for manufacturing final products. JLSL was also supervising the manufacturing process and was taking steps to ensure the quality of the products. All activities like handling the raw materials, its accounting and processing was done by appellant (earlier known as PMSL). This means that both the parties were involved in the manufacturing activity. It is also to be noted that such manufacturing arrangements are very common in the country. In such situation legal provisions exist in Central Excise laws for considering either of the two parties as manufacturer. In most cases the persons doing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture there was no need to adopt the procedure laid down in Notification 214/86-C.E. 18. We find that the predominant activities for manufacture were done by appellant (earlier known as PMSL). Their plant and machinery was used and their employees were doing the processes. In the matter of deciding who is the manufacturer of excisable products, ownership of raw materials is not a critical criterion. We do not see any merit in the argument of Revenue that the activities of making available the factory and infrastructure and doing activities of raw material handling, accounting etc. are to be considered as activities distinct from manufacturing activity. All the activities done by the appellants have to be seen together and when it is so seen it is clear that they were doing manufacturing activity. For reasons already explained, the fact that PLSL was paying excise duty does not lead to a legal position that the appellant (earlier known as PMSL) was not doing manufacturing activity. The fact that appellant (earlier known as PMSL) was charging two components towards job-charges separated as fixed cost and variable cost cannot alter this situation so long as goods were manufactured. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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