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TMI Blog2022 (8) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... There are no reason to differ with the conclusions arrived at by the Ld.Commissioner. Nothing has been stated by the Revenue while filing this Appeal - appeal dismissed - decided against Revenue. - Service Tax Appeal No.32 of 2009 - FINAL ORDER NO. 75408/2022 - Dated:- 27-7-2022 - SHRI SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND SHRI P.DINESHA, MEMBER(JUDICIAL) Shri K.Chowdhury, Authorized Representative for the Appellant (s) NONE for the Respondent (s) ORDER This Appeal, filed by the Revenue, is directed against Order-in-Original No.CCE/BBSR-II/S.Tax/No.14-COMMISSIONER/2008 dated 26.11.2008. By the impugned order, the Ld.Commissioner has dropped the demand issued under show cause notice C.No.(15)25/S.Tax/Adj./BBSR-II/I/2006/22072-74A dated 29.11.2007. 2. The respondents herein are engaged in carrying out the job of bottling, blending and labeling of Indian made Foreign Liquor (IMFL) in their work premises. Acting on intelligence, investigation was undertaken which culminated into issuance of show cause notice dated 27.11.2007 asking them to show cause as to why :- 1. Service Tax including Education Cess amounting to Rs.95,14,725/- (Rupees Ninety Five ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges/expenses such as bottling charges, manufacturing charges etc. incurred by them for production of IMFL on behalf of their clients and had been paid also. The alcoholic beverages are sold by them as per directions of JIL CML. They receive consideration i.e. job charges for undertaking the manufacturing activity on job work basis. The adjudicating authority has observed that as per Board s Circular No.249/1/2006-CX.4 dated 27.10.2008 the whole process would amount to manufacture within the meaning of section 2(f) of the Central Excise Act, 1944 even though, IMFL, a non-excisable product is emerging finally. As such the service of production rendered by M/s. Hi- Tech Bottling Pvt.Ltd. for manufacturing of IMFL in the instant case, is covered under the exclusion clause of section 65(19) of the Finance Act, 1994 and cannot be subject to levy under Business Auxiliary Service . Accordingly, he dropped the demand of Service Tax on the activities carried out by M/s Hi-tech Bottlign Pvt.Ltd. 3.0 The Committee, after due consideration of the facts and figures of the said order, has, interalia, observed that the adjudicating authority has erred in holding that the activity of blendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2(f) of the C E Act, 1994, the same was rightly classifiable under the category of Business Auxiliary Service and the notice was liable to pay Service Tax on the amount received for rendering such service to another person. In the case of M/s. Daurala Sugar Works, involving similar facts, the adjudicating authority decided the matter holding that the impugned activity of blending and bottling, falls under the ambit of Business Auxiliary Service . The appeal preferred by the party in the said case is pending before the CESTAT, Principal Bench [2008 (12) STR.383 (Tri-Del.)]. So, as the matter is sub-judice, the Order-in-Original needs to be challenged. 5. From the definition of Business Auxiliary Service as contained in Section 65/95 of the Finance Act, 1994 as amended any process which amounts to manufacture in terms of Section 2(f) of Central Excise Act has been excluded from the definition of Business Auxiliary Service . The Ld.Commissioner has in his order relied upon Circular dated 27.10.2008 issued by Central Board of Excise Customs stating as follows:- 01. Brief Background Issues relating to taxable services provided during the course of production of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required State Licences for manufacture of the alcoholic beverages. In trade, such licencees/ manufacturers are called the Contract Bottling Units or CBUs. The cost of raw materials (and in some cases, even capital goods) and other expenses are either paid by the BO or reimbursed by the BO. Statutory levies (i.e. State Excise Duty) are also reimbursed to the CBU by the BO. The alcoholic beverages are sold by or as per the directions of the BO and profit or loss on account of manufacturing and sale of alcoholic beverages is entirely on account of BO, who thus holds the property, risk and reward of the products. The CBU receives consideration (i.e. job charges) for undertaking the manufacturing activity on job work basis. There is no doubt that under such an arrangement, CBU is a service provider providing services to BO. A doubt has arisen, whether or not the CBU provides a taxable service namely the Business Auxiliary Service (BAS) to BO. This taxable service includes any service provided or to be provided in relation to production or processing of goods for, or on behalf of, the client . This taxable service however, by definition excludes any activity that amounts to manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct name, character or use; and capable of being marketable, emerges; and (b) In the instant case the exclusion provision under the definition of Business Auxiliary Service (under the Finance Act, 1994) makes a reference to a definition of the word manufacture ) figuring under another Act (i.e. The Central Excise Act, 1944). It is a settled law that when a definition from an Act is transposed into another Act, it is as if the said definition is physically written into the borrowing Act without any reference to the context of such definition in the Act from which it is being borrowed. It is the words of that definition, which is imported into the borrowing Act and not the scope of the first Act and the context in which such definition is used in the first Act. Admittedly the scope of the two Acts would be distinct and if the definition is borrowed from the first Act into the second Act having different scope, the same would get disturbed/distorted if the context and scope of the earlier Act is also imported. Thus just because Central Excise Act does not extend to the manufacture or production of alcoholic beverages meant for human consumption, it cannot be said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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