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TMI Blog2024 (10) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that in order to classify the activity as liable to service tax, the said activity should fall under any of the above sub-clauses. According to the ld. adjudicating authority, the activity undertaken by the appellant falls under sub-clause (v) of Section 65(19). However, the appellant has submitted that as per the definition cited above, business auxiliary service does not include any activity that amounts to manufacture . According to the appellant, the activity undertaken by them amounts to manufacture and hence it goes out of the purview of the definition of business auxiliary service . It is required to be examined whether the activity undertaken by the appellant amounts to manufacture or not, as defined under section 2(f) of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment or supply agency service. 1.1. On verification of the records of the appellant, it was found by the Officers of the Department that the appellant had been working for M/s. Rohit Ferro Tech Ltd., Bishnupur and M/s. Sri Vasavi Industries Ltd., Bishnupur. The appellant was asked to submit copies of the work orders executed by them in respect of the above said companies. 1.2. Upon scrutiny of the documents submitted by the appellant, it appeared to the Revenue that the appellant had been rendering the taxable service in the nature of business auxiliary service , but had not paid Service Tax on the same. It was found that the main job of the contractor was segregating the metal and slag, sizing and packaging as per the requirement of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contend that the activity undertaken by them falls within the ambit of Section 2(f) of the Central Excise Act, 1944 and hence, the same amounts to manufacture ; since their activity amounts to manufacture, no Service Tax is payable on the said activity. 4.1. The appellant also relied on Notification No. 08/2005-S.T. dated 01.03.2005 wherein the processing of raw materials or semi-finished goods supplied by the client are exempted from the purview of Service Tax when the goods, after processing, are used in the production of the final product, on which appropriate duty of excise is payable/paid. Accordingly, the appellant submits that they are eligible for the benefit of Notification No. 08/2005-S.T. also. 4.2. In view of the above, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any activity that amounts to manufacture of excisable goods. 7.2 From the above, we observe that in order to classify the activity as liable to service tax, the said activity should fall under any of the above sub-clauses. According to the ld. adjudicating authority, the activity undertaken by the appellant falls under sub-clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t; 7.5. We find that the definition of manufacture as provided under Section 2(f) is wide enough to cover all processes which create a change in the product whereby a new product emerges in the end, which is marketable. In the present case, the appellant is undertaking the work of sizing and packaging and these are essential processes required to make the product marketable. Accordingly, we hold that the activity undertaken by the appellant falls squarely within the ambit of the definition of manufacture as defined under Section 2(f) of the Central Excise Act. Once the activity is held as amounting to manufacture , it is excluded from the purview of Service Tax as per the definition of business auxiliary service . Thus, we hold that the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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