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TMI Blog2024 (3) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... T KOLKATA] and it was held that As it has already been decided that the said activity undertaken by the appellant amounts to manufacture and the appellant is doing the said activity on job work basis and such job worked goods have suffered duty at the end of the principal manufacturer, in these circumstances, the demand of Service Tax under the category of business auxiliary service is not sustainable against the appellant. As the issue has already been decided by this Tribunal, wherein it has been held that the activity undertaken by the appellant amounts to manufacture and the appellant is doing such activity on job work basis and such job work has suffered duty at the end of principal manufacturer. The appellant is not liable to pay service tax under the category of Business Auxiliary Service. Accordingly, the impugned demand is not sustainable against the appellant - Appeal allowed. - HON BLE MR. ASHOK JINDAL , MEMBER ( JUDICIAL ) And HON BLE MR. K. ANPAZHAKAN , MEMBER ( TECHNICAL ) Ms. Payal Bharwani , Chartered Accountant for the Appellant Shri S. S. Chattopadhyay , Authorized Representative for the Respondent ORDER Per Ashok Jindal : The appellant is in appeal against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed goods has suffered duty. In that circumstances, no service tax is payable by the assessee. 4. The ld.A.R. for the Revenue reiterated the findings of the impugned order. 5. Heard both sides and considered the submissions. We find that in this case, the process undertaken by the appellant makes a new identifiable product and the same cannot be held that it is only a job work activity. In fact, the activity undertaken by the appellant amounts to manufacture as held by this Tribunal in the case of M/s Mohata Coal Company (P) Limited (supra), wherein this Tribunal has relied on the decision of the Tribunal in the case of M/s Ferro Scrap Nigam Limited Vs. Commissioner of CGST Excise,Bolpur vide Final Order No.75013- 75014/2021 dated 19.01.2021 and passed the following orders : 7. We find that the issue has already been examined by this Tribunal in the case of M/s. Ferro Scrap Nigam Limited (supra) wherein this Tribunal observed as under: - 7. We find that the issue already stands decided in favour of the assessee. For the period prior to 16.06.2005, the definition of BAS under Section 65(19)(v) of the Act, interalia, mean any service in relation to production of goods on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods and further on behalf of the client . As regards the expression production of goods , we note that the same was amended in June 2005 and was substituted by the expression - processing of goods. As such it is clear that prior to the amendment and in the absence of the words processing the same has to be interpreted in a manner that the activity results in production of goods. We may here observe that every production may not amount to manufacture but admittedly every manufacturing activity involves production of goods, inasmuch as the term manufacture would include production though every production may not include the manufacturing activity. Inasmuch as the Commissioner in his order dated 21-9- 2006 has held that the said activity does not amount to manufacture and such order stands accepted by the Revenue, it has to be held that there was no production of goods. As such we agree with the ld. Advocate that the first criteria of the definition is not satisfied. 9. As regards second criteria that the said activity has to be on behalf of the client , we find that the matter is no longer res integra and stand settled by various decisions of the Tribunal. Even the Board‟s Cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. - 2011 (21) S.T.R. 34 (Tri.) it was held as under : 5. We find that activity undertaken by the appellants in this case was similar to the one as existed in the case of Auto Coats. Therefore, in the light of above two decisions discussed above, it cannot be said that appellants have undertaken job work on behalf of the clients, in view of the fact that there were only two parties to the transaction in this case, whereas where the production is on behalf of the clients, there would be three parties. Since, services undertaken by the appellants is not covered by the definition, no service tax is attracted. Accordingly, impugned order is set aside and appeal is allowed . Further, in the case of Rathour Engg. Works - 2012 (27) S.T.R. 37 (Tri.-Del.), the Tribunal held as under :- 6. The appellants carry out the process of grinding and smoothening the edges, called fettling of the rough castings, received from principal manufacturers who clear the goods after carrying out further processes. Since there is no dispute that this activity of the appellants does not amount to manufacture, it can only be called processing not amounting to manufacture, which was not taxable during the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... client] referred in sub-clause (v) of clause (19) of Section 65 of the said Finance Act, from the whole of service tax leviable thereon under Section 66 of the said Finance Act : Provided that the said exemption shall apply only in cases where such goods are produced [or processed] using raw materials or semi- finished goods supplied by the client and goods so produced [or processed] are returned back to the said client for use in or in relation to manufacture of any other goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as amended by the Central Excise Tariff (Amendment) Act, 2004 (5 of 2005), on which appropriate duty of excise is payable. Explanation. - For the purpose of this notification, - (i) the expression production [processing] of goods means working upon raw materials or semi-finished goods so as to complete part or whole of production [or processing], subject to the condition that such production [or processing] does not amount to manufacture within the meaning of Clause (f) of Section 2 of the Central Excise Act, 1944 (1 of 1944). (ii) appropriate duty of excise shall not include Nil‟ rate of duty or duty of excise wholl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the law declared by he Tribunal in the above referred matter, which also stands upheld by the Hon ble Jharkhand High Court, is fully applicable to the facts of this case. 10. In view of the aforesaid, the issue is no longer resintegra, since decided in favour of the assessee. We do not find any reason to take contrary view and therefore, the demand raised vide the impugned adjudication order cannot be sustained and hence, the same is set aside. Consequently, the appeal filed by Revenue to dispute the cum tax benefit is liable to be rejected since there cannot be demand of service tax as held above. 11. The appeal filed by assessee is thus allowed with consequential relief as per law. The appeal filed by Revenue is rejected. 7.1 As it has already been decided that the said activity undertaken by the appellant amounts to manufacture and the appellant is doing the said activity on job work basis and such job worked goods have suffered duty at the end of the principal manufacturer, in these circumstances, the demand of Service Tax under the category of business auxiliary service is not sustainable against the appellant. 8. Therefore, we set aside the impugned order and allow the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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