9911796707
TMI Blog2025 (4) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... h is a separate decorative process rather than an intermediate textile processing step. As per the Department, the appellant has not discharged its service tax liability as per the provisions of the Finance Act, 1994 and Service Tax Rules, 1994. Thereafter, the Department obtained data from CBDT which indicated that the appellant had earned substantial revenue from the job work services without obtaining service tax registration or making service tax payments. Thereafter, the CGST Commissioner Rohtak issued SCN dated 27.04.2021 alleging that the company failed to pay service tax on textile services rendered during the period from 01.04.2015 to 30.06.2017. Accordingly, service tax demand was raised along with interest under Section 75 of the Finance Act and penalties under Section 77 and 78 of the said Acts. The appellant filed reply to the SCN and as per the appellant, its services were exempted under Entry No.30(ii)(a) of the Mega Exemption Notification no.25/2012-ST which exempts job work related to textile. However, the Department contended that the embroidery is a distinct process and does not qualify as textile process which is explicitly mentioned in the exemption notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aribhai Gondaliya vide its OIA No.AHM-EXCUS-002-APP-115/2023-24 dated 05.10.2023; Jayantibhai Tapubhai Parmar vide its OIA No.AHM-EXCUS-001-APP-142/2023-24 dated 03.10.2023 and Shailesh Bhavanbhai Dhannai vide its OIA No.AHM-EXCUS-002-APP-44/2023-24 dated 20.07.2023. He further submits that the impugned order has not disputed that the appellant is engaged in doing embroidery work but has held that embroidery work cannot be said as textile processing; the meaning of the term "textile processing" with reference to the said exemption notification was examined by the CESTAT, Madras and it has been held by the Tribunal as under: 6.2 The lower authorities denied the exemption merely on the ground that the said services are not used for textile processing. On careful reading of the above notification, it is evident that service tax was exempted during the relevant period for the services provided under Business Auxiliary Service if it relates to agriculture, printing, textile processing or education. The appellants are Textile manufacturer and exporters. The word "textile processing" referred in the notification is to be understood in a broader sense. The dictionary meaning of "textile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you said letter is regarding leviability of service tax under Business Auxiliary Service (BAS) on computer embroidery work carried out on job work. 3. The matter has been examined. The definition of BAS as provided under Section 65 (105)(zzb) read with Section 65 (19) of the Finance Act, 1994, does not include any activity that amounts to manufacture of excisable goods. It also mentions that excisable goods has the meaning assigned to it in clause (d) of section 2 of the Central Excise Act, 1944 and manufacture has the meaning assigned to it in clause (f) of section 2 of the Central Excise Act 1944. The Supreme Court in the case UOI v Nandi Printers Pvt. Ltd. [2001 (127)ELT 645 (SC) 2001-TMI-45852 - SUPREME COURT OF INDIA) held that "the mere fact that the rate of duty on printed cartons was NIL by reason of exemption would not make printed cartons non-excisable goods". The Supreme Court again in the case of CCE Hyderabad v Vazir Sultan Tobacco Co. Ltd. (1996 83 E.L.T. 3 (S.C.) 1996-TMI-44222 SUPREME COURT OF INDIA) at page 10 has observed that if by virtue of exemption the rate of duty was reduced to NIL the goods specified in the Tariff would still be regarded as excisable. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court in the case of All India Federation of Tax Practitioners v. UOI (2007) 10 STT 166 laid down a test that where goods are specified in the schedule they are excisable. Embroidery work is a manufacturing activity falling under Chapter heading 5810 of the Central Excise Tariff Act. Once the activity is a manufacturing activity of goods specified under Central Excise Tariff Act, the said activity is not covered in the purview of BAS. From the above clarification, it has been cleared the doubt surrounding the taxability in case of excisable goods having NIL rate. The CBEC Instructions dated 15.07.2011 resolved the issues by stating that embroidery work is a manufacturing activity falling under Chapter heading 5810 of the Central Excise Tariff Act. Once the activity is a manufacturing activity of goods specified under Central Excise Tariff Act the said activity is not covered in the purview of Business Auxiliary Service as defined under Section 65(19) of the Finance Act. 1994 | also rely the case of Ramdarshan Rolling Mills Vs. C.C.E. Indore 2017(51)S.T.R.462 (Tri.-Del) wherein Hon'ble Tribunal has held that "in terms of Section 65(19) "Business. Auxiliary Service does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under : 11. Coming to third and final issue as to whether any demand can be sustained on the basis of difference between the figures of ST-3 Returns and the balance sheets, we find that it is a settled principle of law that service tax can be levied only when there is a clear identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cannot be demanded and confirmed. For this reason, we are of the considered opinion that it is not open for the Department to raise demands on the basis of other statutory returns like Income Tax Returns or balance sheets without proving that such service has been rendered by the assessee and consideration thereof has been received. Similarly, no service tax demand can be raised and confirmed on the basis of notional income. We find that Tribunal in the case of Synergy Audio Visual Workshop (P) Ltd. 2008 (10) STR 578 (Tri. Bang.) held that: 5.1 The other ground is for confirming demands is that the appellants had shown certain amounts due from the parties in their Income Tax returns and Revenue has proceeded to demand ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
