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TMI Blog2017 (12) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... the Mysore Paper Mills, was aware of the fact of placing work orders upon various contractors, for extraction collection, debarking stacking of the pulp wood. From this it becomes clear that there was no mala fide on the part of the contractors to suppress the fact of placement of work orders upon them - there is no mala fide motive on the part of the contractors not to pay the service tax - extended period not invocable. As the matters are being remanded to the original adjudicating authority for considering the aspect of manufacture, we direct him to examine each and every file separately and to limit the demands, if any, to the normal period - appeal allowed by way of remand. - ST/1568/2012-DB - Final Order No. 23181-23223 / 2017 - Dated:- 13-12-2017 - ST/1568/2012-DB, ST/1569/2012-DB, ST/1570/2012-DB, ST/1571/2012-DB, ST/1572/2012-DB, ST/1573/2012-DB, ST/1574/2012-DB, ST/1575/2012-DB, ST/1577/2012-DB, ST/1578/2012-DB, ST/1579/2012-DB, ST/1580/2012-DB, ST/1582/2012-DB, ST/1583/2012-DB, ST/1584/2012-DB, ST/1585/2012-DB, ST/1586/2012-DB, ST/1587/2012-DB, ST/1588/2012-DB, ST/1589/2012-DB, ST/1591/2012-DB, ST/1592/2012-DB, ST/1702/2012-DB, ST/1703/2012-DB, ST/1704/2012-DB, ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, classifiable under the category of Business Auxiliary Services under clause (v) of Section 65(19) of the Finance Act, 1994. Clause (v) in Section 65(19) (relating to production or processing of goods, for, or on behalf of, the client) was inserted vide Notification No. 19/2005- ST dated 07-06-2005, effective from 16-06-2005. Therefore it appeared that the service tax on production or processing of goods for and on behalf of client under the category of Business Auxiliary Services was liable to be paid with effect from 16-06- 2005. On these allegations, the various contractors were issued show-cause notice demanding service tax under the category of Business Auxiliary Service and after following the due process, the original authority confirmed the demand along with interest and penalty. Aggrieved by the said order, appellant filed appeal before the Commissioner (A), who substantially upheld the Order-in-Original with some modification and hence, these appeals. 4. Heard both the parties and perused the records. 5. Learned counsel for the appellant submitted that the impugned orders are not sustainable in law in view of the following grounds raised by him. (i) The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that any evidence has to be furnished by the job-worker thereto (x) Invoking of extended period cannot be sustained or justified. Awarding of the contract has been well within the knowledge of the department. They cited case laws in this regard. (xi) Since the demand itself cannot be sustained, both on the aspect of limitation/time bar as well as on merits the demand of interest also be unsustainable. The imposition of penalty under Section 76, 77(1)(a), 77(2) and 78 would deserve to be set aside and quashed in toto, particularly since the charge of suppression or willful misstatement has not been established in the impugned OIO. (xii) Not granting the benefit of Section 80 in the facts and circumstances of the matter involved herein would be opposed to principles well laid down in several cases and they cited many case laws in this regard. He further submitted that the activities undertaken by the appellant does not fall under the service tax category of Business Auxiliary Service. He also submitted that the identical issue involved in these appeals were involved in other bunch of appeals decided by this Tribunal vide Final Order No.21720-21748/2015 dated 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has to be held that they have processed the goods for M/s Mysore Paper Mills Ltd. By drawing our attention to the tender notification (para 39), learned A.R. submits that it is not a simple case of felling and cutting of the trees but involved further conversion to pulp wood billets, which shall be done only by cross-cut saws to prevent wastage. Para 40 of the tender notification gives the length of pulp wood billets and if there is any deficiency in debarking, then debarking for such pulp wood delivered by the contractor, will be got done at Mill Yard at the risk and cost of the contractor. These facts clearly show that the appellants were not merely felling, cutting, and transporting the trees but was also converting the same into pulp wood billets of the specified sizes. As such he submits that the appellants have processed the wood and as such activity would admittedly fall under the definition of business auxiliary service. As regards limitation, learned A.R. submits that the appellant never informed the department about the said activity and as such there is no occasion for the Revenue to take action against them. He also submits that the tender notification clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 (1 of 1994) Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) commission agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services; (b) information technology service means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems; In terms of Section 65 (19) (v), production or processing of goods for, or on behalf of the client is a service falling under the category of business auxiliary service. As such, we are required to examine as to wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deliberated upon by them. 10. We have already expressed our views that the activities undertaken by them in any case amounts to processing. However, such an activity may amount to manufacture also as contested by the learned advocate. Inasmuch as the issue of manufacture was never raised before the authorities below, we deem it fit to set aside the impugned orders and remand the matters to the original adjudicating authority for the purpose of deciding on the said plea of the assessees. If the adjudicating authority comes to a conclusion that the activity does not amount to manufacture, the appellants would be liable to pay service tax under the category of business auxiliary service by holding that they have done processing of the goods for their clients. 11. Learned advocate has also challenged the impugned orders on the point of limitation. He agrees that in some cases, the demands are falling within the limitation period inasmuch as there were repeated show-cause notices to each and every contractor. The first show-cause notice was beyond the limitation period and thereafter periodical show-cause notices stand issued within the normal period. 12. As regards limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue to reflect upon the mala fides of the assessee. Number of contractors are involved and it cannot be presumed that all of them collided together to suppress the said fact of grant of work orders to them. Issuance of tender notifications and placement of work orders is a matter of record of M/s Mysore Paper Mills, in which case, it is difficult to accept that the same were suppressed by the present appellants. We further examine learned A.R. s contention that in terms of the tender notifications it is clearly written that the service tax, if any, would be paid by the company subject to the contractors fulfilling the legal formalities. In fact we find that the said clause goes in favour of the assessee. The contract was not for a lump some value inclusive of all the taxes and any taxes required to be paid by the contractors, including the service tax was to be reimbursed by the company. In such a scenario, we cannot find any mala fide motive on the part of the contractors not to pay the service tax. In view of the foregoing discussion, we agree with the learned advocate that there was no justifiable occasion for the Revenue to invoke longer period of limitation. As the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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