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TMI Blog2018 (8) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... al provided to them by L & T in L & T’s own premises are nothing but the processes to convert the said raw-material into a customized part of the whole transmission tower and as such, the activity of the appellants is incidental/ ancillary to the completion of the manufactured product and thus, falls under Section 2 f (i) of Central Excise Act, 1944 - It is clear that it includes the activity which is production or processing of the goods for or on behalf of the client but does not include any activity that amounts to manufacture of excisable goods. Benefit of exemption N/N. 6/05 dated 1st March, 2005 - Held that:- It is an admitted fact that M/s. L & T had been performing further manufacturing activities on the semi finished goods processed by the appellants and have been clearing those goods on payment of duty as well as under the exemption Notification without payment of duty. The appellants have failed to provide the gross aggregate value received by them from M/s. L & T even before the first Appellate Authority. Resultantly, the authority has rightly denied the benefit of exemption N/N. 06/05 to the appellants - With respect to granting the benefit of exemption N/N. 08/2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow were served upon them:- Appeal No. Name of appellant. Show cause notice Period involved Activity which is alleged to be BAS Date of Original order Date of Appellate order ST/57428/2013-DB Hardev Singh 22.03.2011 01.04.07 to 31.03.10 Straightening and debarring of angles, straightening of heavy section angles, lengthwise separating, bundling and moving to respective place, stack after segregation, unloading and seggragation of one feet scrap, unloading of chemicals/ lead, bolt and nut. 06.06.12 06/02/2013 ST/57429/2013-DB Majister Singh 22.03.2011 01.04.06 to 31.12.10 Loading picking, dipping, finishing and offering to final inspections of only punched plates and punched cleats of tower parts, taking dross from bath, moulding and handling over to stores, zinc as screening and packing and cleaning of filter press, flux tanks, rinse water tank, acid tank sludge, and other cleaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material near to respective machine sequentially/ priority wise, wire receipt and stacking, on the raw materials/ inputs, etc. etc. 29.03.12 06/02/2013 ST/52593/2014-DB C P Moury 22.03.11 01.10.06 to 31.12.10 Fabrication of tower parts including shearing, cutting, punching, numbering, notching, marking, drilling debarring and getting inspected through QA. 16.03.12 28/01/2014 ST/50101/2015-DB C P Mourya 18.04.12 01.01.11 to 31.03.12 Fabrication of tower parts including shearing, cutting, punching, numbering, notching, marking, drilling debarring and getting inspected through QA. 30.08.13 24/09/2014 ST/50102/2015-DB Sanjay Kumar Yadav 17.10.12 01.01.11 to 31.03.12 Fabrication of tower parts including shearing, cutting, punching, numbering, notching, marking, drilling debarring and getting inspected through QA. 30.08.13 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24/09/2014 ST/50323/2015-DB Rajendra Vishwakarma 16.09.13 01.04.12 to 31.03.13 Fabrication of tower parts including shearing, cutting, punching, numbering, notching, marking, drilling debarring and getting inspected through QA. 28.01.14 14/10/2014 ST/50324/2015-DB Rajkumar Vishwakarma 03.10.12 01.01.11 to 31.03.13 Fabrication of tower parts including shearing, cutting, punching, numbering, notching, marking, drilling debarring and getting inspected through QA. 05.02.14 14/10/2014 ST/50327/2015-DB Paramjeet Singh 16.09.13 01.01.11 to 31.03.13 Fabrication of tower parts including shearing, cutting, punching, numbering, notching, marking, drilling debarring and getting inspected through QA. 17.02.14 14/10/2014 ST/50328/2015-DB Anil Kumar 14.08.13 01.04.11 to 31.03.13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment has wrongly alleged the activities of the appellant to fall under the category of the Business Auxiliary Services, it is mentioned that the same is very much a manufacturing activity, as the appellants are engaged in fabrication of tower parts which includes cutting of angles, punching of angles, computerized numbering plates on which parts are erected on the site, notching, bending, drilling etc. It is submitted that holes are made in the angles as per the drawings provided by the client / L T. It is further impressed upon that all these activities, since, aid in manufacturing of the final product i.e. the transmission tower. Therefore, these activities are incidental or ancillary to the completion of manufactured product and as such fall very much in the definition of manufacture. The Orders under challenge to that effect are accordingly, prayed to be set aside. The appellants have mainly relied upon the decision of Larger Bench of this Tribunal in the case of Mahindra Mahindra Ltd. vs. CCE, Aurangabad 2005 (190) ELT 301. 6. Ld. DR while justifying the impugned order has impressed upon the findings of Commissioner (Appeals), where appellants were found to enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in clause (f) of Section 2 of the Central Excise Act, 1944. (Emphasis Supplied) 5. The relevant part of Section 2 (f) of the Central Excise Act, 1944 reads as follows:- 2(f) manufacture includes any process, - (i) Incidental or ancillary to the completion of a manufactured product; (ii) ....................; or (iii) ..................... and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his account. 7.1 Word manufacture as defined above has been a subject matter of interpretation by various judgements of this Tribunal as well as of the Hon ble Supreme Court. (i) Hon ble Supreme Court in the case of Collectorate, Central Excise Mumbai vs. S.D. Chemicals Private Limited reported in 1995 (2) SCC 336 at para 12 page 342 held that the definition of the expression manufacture ... is not confined to the natural meaning of the expression manufacture but is an expansive definition. It was also held that one of the main tests ... is whether on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of structures and they acquired a distinctly different shape to suit the structural designs. For example, if iron or steel angles and plates are cut to make a steel table or chair which can be dismantled, it cannot be said that there are no goods manufactured because the iron and steel angles or plates remain such angles and plates though of different sizes, and merely holes are punched and screws fitted. Unlike in liquid mixtures, the raw material of iron and steel or wood will retain their identity, but it is precisely their being cut, and designed, punched and fitted to make an article commercially known that involves manufacture of an article distinct from the angles, sheets, tubes etc. used in it. Mere drilling holes or mere cutting jobs in isolation may not by themselves involve manufacture of an article, but, converting raw material like angles, tubes, plates etc. to bring about a distinct commodity will surely amount to manufacture as it is not mere drilling holes or cutting, but the activity is aimed at bringing about a distinct commodity. Thus, making of porta cabin from iron and steel angles with, roof frame-work i.e. trusses, doors, windows, ladders in it made by dri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and assemble them for that purpose as per the designs and having fabricated them, to use them for permanently fixing them in the structures which were to be erected as per the design under the works contracts. 9. Now coming to the case law relied upon by the Department, it is observed that many of them are pre Mahindra and Mahindra case. The adjudication in the case of Commissioner of Excise, Bangalore vs. Osna Chemical Pvt. Ltd. (supra), no doubt it is held that the raw-material Bitumin therein when is processed by being boiled and being blown with air, thereafter, the same is only for improving the quality of the product. Hence, cannot be amount to manufacture. To our opinion, the said adjudication is not applicable to the facts of the present case because in the present case no doubt the raw-material in question has undergone the simple process of cutting of angles, punching of angles, notching, bending, drilling etc. but the fact remains is that those activities are being carried out with the sole objective of those raw-material to be customised into a particular shape and size, even in terms of the location of hole/punch there upon, to suite the design, specification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upto the aggregate value of ₹ 8,00,000/- during the year 2007-08 and ₹ 10,00,000/- w.e.f. 1st April 2008 to the service provider. Vide the Order-in-Original, it was observed that no evidence has been produced by the appellants about the aggregate value of taxable services. Resultantly, the benefit of this Notification was denied and the same findings are confirmed by Commissioner (Appeals). We are of the opinion that it is an admitted fact that M/s. L T had been performing further manufacturing activities on the semi finished goods processed by the appellants and have been clearing those goods on payment of duty as well as under the exemption Notification without payment of duty. The appellants have failed to provide the gross aggregate value received by them from M/s. L T even before the first Appellate Authority. Resultantly, the authority has rightly denied the benefit of exemption Notification No.06/05 to the appellants. With respect to granting the benefit of exemption Notification No.08/2005-ST dated 1st March, 2005 also we do not find any infirmity in the impugned order. The findings thereof are upheld qua both these Notifications. 13. As a result of enti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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