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TMI Blog2023 (9) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) has come to the conclusion that the activity of the appellant is indeed an activity amounts to manufacture in terms of Section 2(f) which is excluded from the definition of Business Auxiliary Service as well as in the Notification No. 8/2005-ST. Therefore, the finding of the learned Commissioner (Appeals) is convincing and there are no infirmity therein. It appears that the contention of the Revenue is that even though the same activity though amounts to manufacture but since M/s L T is the manufacturer, the appellant is a service provider for the same activity - as per the exclusion provided in the definition of Business Auxiliary Service, the activity is not a person specific but the activity specific, therefore, if the activities of welding, fabrication, cutting, binding and other related activities amount to manufacture even if M/s L T is a manufacturer but the activities per se is manufacturing activity irrespective of the ownership of the goods or M/s L T being a manufacturer, the respondent who carried out such activity which is otherwise a manufacturing activity in terms of Section 2(f) merely because M/s L T is a manufacturer will not fall under the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcluded from the definition of Business Auxiliary Service, hence not liable to service tax. The related finding of the learned Commissioner (Appeals) is reproduced below: 8. I have considered the submissions made by both the sides. I find that the appellants are carrying out the activity of welding, fabrication, cutting etc. etc. and other related activities in respect of manufacture of Ship. It has been explained by the appellants that without carrying out the activity of welding, fabrication, cutting and other related activities in respect of manufacture of Ship, one cannot imagine the design of Ships. The appellant has further contended that the processes carried out by them are incidental or ancillary activity to the completion of manufactured product i.e. Ships. They further submitted that it is provided under Section 2(f) of Central Excise Act 1944 that 'manufacture' includes any process which is incidental or ancillary to the completion of manufactured products. I have considered the submissions made by both the sides. I find that the appellant is carrying out the activity of welding, fabrication, cutting, bending, coating, painting and other related activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to the manufacturing of the end product without which, the manufacture of the end product would be impossible or commercially inexpedient. This Court in several decisions starting from Tungabhadra Industries V. CTO AIR 1961 SC 412, Union of India V. Delhi Cloth General Mills Co. Ltd., AIR 1963 SC 791-1977 (1) ELT J 199 (SC), South Bihar Sugar Mills Ltd. V. Union of India, AIR 1968 SC 922- 1978 (2) ELT J 336(SC) and in line of other decisions has explained the meaning of the word 'manufacture' thus; 10. I further find that the following decisions are also relevant to the facts of this case. (a) M/s.Keshoder Shiv Prasad vs. UOI [1992 (61) ELT 404(MP)] (b) M/s.G.D. Industrial Engineers, Faridabad vs. CCE Chandigarh [1983(14) ELT 1994 (CESTAT)] (c) Collector of Central Excise vs. S.D. Fine Chemical-[1995(77) ELT 149 (SC)) I have perused the above decisions and also the decision of the Apex Court in the case of Grasim Industries. I find that it has been held in these decisions that manufacture in terms of Section 2(f) includes incidental or ancillary to the completion of the manufactured product. I find that the appellant is carrying out the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the meaning assigned to it in clause (d) of Section 2 of the Central Excise Act, 1944. From the above given definition of BAS, it is crystal clear that any activity that amounts to 'manufacture' within the meaning of clause (f) of Section 2 of Central Excise Act 1944, is excluded from the provisions of service tax under BAS. It has already been concluded above that the activities carried out by the appellants amount to manufacture and therefore the said activities very much fall within the exclusion clause of the definition of BAS. 12. In view of the above, the activities carried out by the appellants do not attract any service tax under the category of BAS and hence the orders of the adjudicating authorities confirming demand of Service Tax under BAS is not sustainable and are liable to be set aside. 13. It is further observed by the adjudicating authority that Notification No.8/2005-ST is applicable and the appellants are liable to pay service tax under the category of BAS. The appellants have contended that the activities carried out by them amount to manufacture and therefore since the explanation (i) of the said Notification is not fulfilled, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Act, 1985; and fact of Nil rate of duty has no relevance for subject issue under consideration. 15. Therefore, keeping in view above position, it is concluded that the findings of Ld. Adjudicating Authorities do not reflect the correct application of legal position to the facts of the case, hence it is not sustainable. Therefore, the impugned orders of Adjudicating Authorities are liable to be set aside. 16. Since the appeals succeed on merit, I do not go into the claim of limitation or other aspects like principles of natural justice etc.. 17. In view of the above discussions, points of determination and findings, I hold that the activities carried out by the appellants fall within the definition of manufacture within the meaning and scope of Section 2(f) of Central Excise Act, 1944 and therefore within the exclusion clause of the definition of BAS and hence not liable for service tax under that category of services. 18. Resultantly, keeping in view of the above, I allow the appeals and set aside the impugned Orders in Original as mentioned in the Annexure- A attached with this order. Stay applications also stand disposed off accordingly. From the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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