9911796707
TMI Blog2023 (8) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted from payment of central excise duty. Hence, the appellant is liable to pay service tax under the category of business auxiliary service on the gross amount received by the appellant for manufacture and supply of the drugs. 2. Shri Amal Dave, Learned Counsel appearing on behalf of the appellant at the outset submits that the activity carried out by the appellant is admittedly a manufacturing activity of excisable goods in terms of Section 2 (f) of Central Excise Act, 1944. He further submits that the manufacturing activity in terms of section 2 (f) is excluded from the definition of Business Auxiliary Service where under the demand was confirmed under sub head "production of goods on behalf of the clients". Therefore, the demand is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985 and Animal Feed supplements Feritas Bolus, Ecot Bolus falling under Chapter 23 of the Central Excise Tariff Act, 1985 on behalf of their clients under loan licenses issued by the Drugs Authorities, which are exempt from the Central Excise Duty. Such services rendered to the clients in the form of manufacture of Goods which are exempt from Central Excise Duty are covered under Business Auxiliary Services as defined in Chapter V of Finance Act, 1944 Clause 65 (19)(V)-Production or processing of goods for or on behalf of the clients and service tax is payable on the gross value of receipt received as labour charges (for such production of exempted goods)" From the above facts stated in the show cause notice it is not underdispute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 944." 4.1 From the above definition it can be seen that in clause (v) of the definition of Business Auxiliary Service, though the production of goods on behalf of the client is a taxable service, however, any activity that amounts to manufacture within the meaning of clause (f) of Section2 of the Central Excise Act, 1944 is out of the ambit of the definition of Business Auxiliary Service. The Revenue has completely misunderstood the definition of business auxiliary service particularly with regard to the service of production of goods on behalf of the client. From the definition it is absolutely clear that all such production activities which are other than the activity of manufacture in terms of Section 2 (f) of Central Excise Act, 1944 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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