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TMI Blog2019 (10) TMI 1245X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing activity of detergent/cake, therefore, in our view it is clear contract of manufacturing of excisable goods. There is no dispute that the appellant after carrying out the manufacturing handed over the excisable goods to M/s. Nirma Ltd who ultimately cleared the said goods on payment of excise duty - there is no contract between the appellant and M/s. Nirma Ltd for supply of man power. The activity carried out by the appellant is at the most considered as production or processing of goods on behalf of the client which is covered under the service head of Business Auxiliary Service . If this be so, then the service is exempted under N/N. 8/2005-ST. Since, the demand was raised under wrong head i.e. Man Power Recruitment and Supply Agency Service, for this reason also the demand is not sustainable. Reliance can be placed in the case of RAMESHCHANDRA C. PATEL VERSUS COMMR. OF SERVICE TAX, AHMEDABAD [ 2011 (11) TMI 415 - CESTAT, AHMEDABAD] from it can be settled that when the contract between the service provider and service recipient is admittedly of contract manufacturing in such case demand under man power supply cannot be made. Revenue neutrality - HELD THAT:- It is a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they have carried out manufacturing of excisable goods on which no service tax is chargeable. He submits that the payment of the manufacturing work is not based on number of workers deputed for such manufacturing but irrespective of any number of workers the charges is on the basis of quantity of goods manufactured. Shri. Dave further submits that the entire proceeding of issuance of show case notices and adjudication thereof is beyond the jurisdiction for the reason that as per the location of the appellant, the jurisdictional commissionerate is Ahmedabad - I whereas the proceedings have been carried out by the commissionerate of Central Excise Ahmedabad-III, therefore, it is beyond the jurisdiction of the proper authority. He further submits that the goods manufactured by the appellant in the factory of Nirma were cleared by M/s Nirma on payment of excise duty. Once the goods is manufactured and cleared on payment of duty on such activity no service tax can be demanded. He also submits without admitting that even if the service tax is payable by the appellant the same is available for CENVAT credit to their principal M/s Nirma Ltd. He invited our attention to two detailed chart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to pay the service Tax. 5. We have carefully considered the submissions made by both the sides and perused the records. We find that the appellant entered into agreement dated 20.11.1999 with M/s Nirma Ltd, Bhavnagar, according to which the appellant was supposed to manufacture of detergent on job work basis. however, subsequently, they made another agreement dated 28.05.2005 according to which the appellant were required to carry out the process of converting the raw-material into detergent/cake in the factory premises of M/s Nirma Ltd, Bhavnagar, with the plant or machinery, material land, and building provided by M/s. Nirma Ltd, Bhavnagar. We observed from both the agreement that the ultimate activity which is to be performed by the appellant is to convert rawmaterial and packing material into packed detergent/cake irrespective of the fact whether the same is carried out in the appellant's premises or at the premises of the service recipient i.e. M/s. Nirma Ltd. Even as per the agreement the clear understanding between the appellant and M/s Nirma Limited is not for supply of man power but to carry out manufacturing activity of detergent/cake, therefore, in our view i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority proceeded on the ground that there was no challenge to the liability of tax at all since the appellant had deposited the amount during investigation. Commissioner (Appeals) in her order simply stated that she agreed with the view of the adjudicating authority and went on to say that appellants had wilfully suppressed the fact of service and appellants failed to pay service tax. Both the authorities have not at all discussed how the service provided by the appellant amounts to service of manpower recruitment or supply. After considering the records, submissions and the orders passed by the lower authorities, I am unable to find any ground on which the appellant can be held liable to service tax on the activity undertaken by them. In the result appellant succeeds and the appeal is allowed with consequential relief to the appellant. Jubilant Industries Ltd-2013 (31) STR 747 (Tri.-Del) "13. We are in agreement with the contention that the same activity cannot be considered as manufacturing and subjected to excise levy and at the same time considered to be a service and subjected to service tax. This principle does not need much discussion and is also recognized un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the person doing the manufacturing activity. Notification 214/86-C.E. is applicable in such cases. 16. Section 2(f) of Central Excise Act defines manufacture and manufacturer as under : "manufacture" includes any process, - (i) incidental or ancillary to the completion of a manufactured product; (ii) which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or (iii) which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixed cost and variable cost and that cannot change the nature of the activity. What could have changed the nature of the activity is a situation where no manufacturing activity took place and still the appellant collected their charges. 19. We also do not find merit in Revenue's argument regarding suppression of facts. The contract was placed before the department from the very beginning when JLSL took Central Excise registration. The Department did not raise any issue at that time. The contention of Revenue is that the fact that they were charging separately for fixed costs and variable costs was not disclosed to the department. As already stated we are of the view that this aspect could not actually change the nature of the activity. 20. In view of the analysis as above we hold that the activities under taken by the appellant during the period April 07 to Sept. 09 being a manufacturing activity carried out cannot be classifies as business support service and subjected to service tax and hence the demand fails. This demand fails on account of time-bar also because we are of the view that all relevant facts have been disclosed to the department in time. So this part of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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