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TMI Blog2024 (3) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... ur has been employed by the appellant and by using their factory and manufactured the goods. These facts have not been examined by the Revenue, moreover, the demands sought to be raised only on the basis of the agreement entered by the appellants with GCPL/GSLL. As the activity undertaken by the appellant is identical which amounts to manufacture, in that circumstances, the appellants are not liable to pay Service Tax on their activity as the manufactured goods has suffered excise duty at the end of the principal - there are no merit in the impugned orders. The same are set aside. Appeal allowed. - SHRI ASHOK JINDAL, MEMBER (JUDICIAL) AND SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL) Shri B.L. Narasimhan, Shri Rahul Tangri, both Advocates and Ms. Payal Bharwani, Chartered Accountant for the Appellant (s) Shri S. Mukhopadhyay, Authorized Representative for the Revenue ORDER Both the appeals have common issue, therefore, both are disposed of by a common order. 2. The facts of the case are that M/s. Godrej Consumer Products Limited (in short GCPL ) is engaged in the manufacturing and selling of mosquito repellant coils. On 19.04.2001, the first appellant entered into an agreement with Assa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CX, Guwahati [2023-VIL-1200-CESTATKOL- ST]. 5. It is further submitted that in the Positive List Regime once the activity falls under manufacture which has been excluded from the ambit of Business Auxiliary Service , it would not automatically fall under Business Support Service in the Negative List Regime. It is the submission of the Ld.Counsel that in the Positive List Regime, the manufacturing activity is specifically excluded from the Business Auxiliary Service , therefore, it cannot be said that the same will fall within the ambit of Business Support Service . It is further submitted that in the Negative List Regime, manufacturing activity was specifically included in the Negative List specified under section 66D of the Finance Act, therefore, no Service Tax is payable. It is also submitted that extended period of limitation is not invocable in the facts and circumstances of the case. 6. On the other hand, the Ld.AR for the department drew our attention to the certain clauses of the agreement and it is his submission that on the basis of these agreement, which are for operation and maintenance, it clearly implicates that the activity undertaken by the appellants falls under Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that Godrej Sara Lee is the declared and licensed manufacturer of goods at the premises which fact has also been acknowledged by the Central Excise Department by issuing a registration certificate. However, it is found that Godrej Sara Lee entered into an agreement on 25.04.01 with the service provider whereunder it has been mutually agreed, interalia, that the manufacturing unit set up together in the premises of service provider would manufacture finished products using the brand name of Godrej Sara Lee as per the quality standards and specifications of Godrej Sara Lee. The agreement also details the obligations and rights of both the parties to the agreement which hare not detailed here for the sake of brevity. One of such obligations on the part of Godrej Sara Lee is to provide the service provider uninterrupted supply of raw material for ensuring satisfactory production performance by the unit and market and distribute the products. It is also provided that the day today management of the plant is to be looked after by the service provider by way of ensuring uninterrupted supply of man power and other things as are necessary to effectively carry out manufacturing operations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that though Godrej Sara Lee is a registered and licensed manufacturer, actual manufacture is undertaken by the supporting manufacturer. In this context the activity of service provider cannot be termed to be of merely a provider of support service, instead they turn out to be the defacto manufacturer. In the process, one is led to the inevitable conclusion that the process undertaken by the provider of service being manufacture undertaken at the instance of Godrej Sara Lee, they cannot be termed to be a mere provider of auxiliary services which are liable to service tax. Instead, liability to tax under the Central Excise Law is to be discharged by them. This is supported by the Board s circular No.80/2004 dated 17.09.04 and the specific clarification issued by the Board vide F.No.257/6/2005 CX4 dated 15.07.05 to M/s. Godrej Sara Lee Ltd. The said clarifications are applicable to the issue in question and to the period involved in the case. The clarification makes it clear that even if production of goods on behalf of a client has been made a taxable service it would not be covered in the ambit of service tax if production activity under-taken is covered within the meaning of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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