Tribunal rules chilling milk not business service

The Appellate Tribunal CESTAT New Delhi allowed the appeal filed by the assessee-Appellants, overturning the Order-in-Appeal issued by the Commissioner (Appeals) Central Excise & Customs, Jaipur. The Tribunal held that chilling of milk for transportation purposes does not constitute business auxiliary service or production of goods, based on legal precedents.

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Issues:
Appeal against Order-in-Appeal No.173174(VC)ST/JPR-I/2013 passed by the Commissioner (Appeals) Central Excise & Customs, Jaipur - Tax liability on chilling of milk service - Interpretation of business auxiliary service under Section 65(19)(v) of the Finance Act, 1994.

Analysis:
The appeal before the Appellate Tribunal CESTAT New Delhi was lodged by the assessee-Appellants challenging the Order-in-Appeal issued by the Commissioner (Appeals) Central Excise & Customs, Jaipur. The case revolved around the tax liability imposed on the chilling of milk service provided by the assessee for Jaipur Zila Dugdh Utpadak Sahkari Samiti Ltd. The Tribunal heard arguments from both sides, with Shri Kumar Vikram representing the assessee-Appellants and Shri Sanjay Jain appearing for the Department.

The Tribunal referred to a previous judgment in the case of Vinayak Industries v. Commissioner of Central Excise & Service Tax, Jaipur-I, where it was established that chilling of milk does not fall under the category of business auxiliary service. Citing the judgment in the case of Sharma Ice Factory v. Commissioner of Central Excise, Jaipur-I, it was highlighted that chilling of milk for transportation purposes does not amount to production or processing of goods. The Tribunal emphasized that chilling of milk solely for long-distance transportation without altering its characteristics does not constitute manufacturing or production under the law. The Tribunal found no grounds to uphold the impugned order and consequently set it aside, ruling in favor of the assessee-Appellants.

In conclusion, the Appellate Tribunal CESTAT New Delhi allowed the appeal filed by the assessee-Appellants, overturning the Order-in-Appeal issued by the Commissioner (Appeals) Central Excise & Customs, Jaipur. The decision was based on the interpretation that chilling of milk for transportation purposes does not qualify as business auxiliary service and does not amount to production or processing of goods, as per relevant legal precedents and judgments referenced during the proceedings.

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