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TMI Blog2015 (6) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... or further processing in to intermediate product outside the factory premises and receiving them back for further consumption. We find from records that the principal manufacturer had clearly intimated the Department as to the intention of getting the part of the process done from the appellant. This activity of processing in the appellant's factory premises is definitely an activity of 'manufacture' inasmuch as, the finished goods coming into existence after processing are different from the inputs which are put into use. When there is a chemical reaction involved, the finished goods coming after the chemical reaction cannot be said to have been not manufactured. We perused the chemical formula and the properties of the inputs and of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which appellant received an amount as a consideration. The Revenue's contention is that the said amount is a consideration on which service tax liability arises under the category of 'Business Auxiliary Services' in terms of Section 65(19) of the Finance Act, 1994. 3. Show-cause notice was issued for demand of service tax liability interest thereof and proposing to impose penalties. The appellant contested the show cause notice on merits, taking a plea that the goods manufactured by them under job-work is amounting to manufacture hence service tax liability will not arise. The adjudicating authority rejected the contention and confirmed the demands with interest and imposed penalties. Appeal filed by the appellant with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld submit that the appellant is processing goods on behalf of his clients and is not discharging the Central Excise duty. Hence, he is correctly charged with non-payment of service tax liability. He reiterates the findings of the lower authorities. 6. We have considered the submissions made at length by both sides and perused the records. The issue before us, whether the activity undertaken by the appellant would amount to manufacture or not. 7. Undisputed facts are that appellant is undertaking job-work of converting product 'Para Nitro Cumene' in to product 'Para Cumidine'. The process involved in this case is a chemical process and a chemical reaction is involved in the process. We also note that it is undisputed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; inasmuch as, the finished goods coming into existence after processing are different from the inputs which are put into use. 10. Secondly, we find strong force in the contentions raised by the appellant that when there is a chemical reaction involved, the finished goods coming after the chemical reaction cannot be said to have been not manufactured. We perused the chemical formula and the properties of the inputs and of the final goods and we find that there is a difference between the two which would mean that the finished goods 'Para Cumidine' is arising out of a manufacturing process. In our considered view, the activity undertaken by the appellant would amount to manufacture even if it is under a job-work procedure. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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