Business Auxiliary Service does not apply where a branded manufacturer only enters a marketing arrangement, not a job-work relationship.

A manufacturer using its own registered brand name was not liable to service tax under Business Auxiliary Service merely because it entered into an arrangement for marketing country liquor. The agreement showed only a marketing relationship and did not establish a job-work arrangement for the marketing entity. On those facts, the Revenue's basis for fastening tax liability on the appellants failed, and the demand for service tax, interest and penalties was unsustainable. Consequential relief followed.

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Issues: Whether the appellants were liable to pay service tax under Business Auxiliary Service on the activity of manufacture and marketing arrangement relating to country liquor.

Analysis: The appellants were found to be the manufacturers of the country liquor under their own registered brand name. The agreement with the marketing entity was held to be only for marketing of the liquor, and the arrangement did not establish that the appellants were job workers for that entity. On the facts, any tax liability, if at all, would not attach to the appellants on the basis alleged by the Revenue.

Conclusion: The appellants were not liable to pay service tax under Business Auxiliary Service for the activity in question.

Final Conclusion: The demand of service tax, interest, and penalties could not be sustained against the appellants, and they were granted consequential relief.

Ratio Decidendi: Where the assessee is the manufacturer using its own registered brand and the arrangement is only for marketing, the assessee is not liable to service tax as a job worker under Business Auxiliary Service.

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