Tribunal allows appeal exempting service tax. Manufacturer's certificate sufficient. No need to prove excise duty payment.

The Tribunal allowed the appeal, setting aside the Appellate Authority's decision. It held that the certificate provided by the manufacturer fulfilled the conditions of the notification, exempting the appellant from service tax on job workers. The appellant was not required to prove actual payment of excise duty by the manufacturer, as the manufacturer was responsible for such payment.

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Issues:
Exemption of service tax on job workers under notification no. 8/2005 dated 1 March 2005.

Analysis:
1. The appeal was filed against the order of the Commissioner (Appeals) dismissing the appellant's appeal challenging the order of the Additional Commissioner (Central Excise) and Service Tax.

2. The main issue in this case pertains to the exemption of service tax on job workers as per notification no. 8/2005 dated 1 March 2005. The notification exempts the taxable service of production of goods on behalf of the client, subject to certain conditions regarding the use of raw materials and payment of excise duty.

3. The Appellate Authority denied the benefit of the notification to the appellant because they failed to prove that the manufacturer had paid the appropriate duty of excise.

4. The appellant argued that the notification only requires the duty of excise to be payable by the manufacturer, not necessarily paid. The Adjudicating Authority was deemed unjustified in denying the exemption based on the lack of proof of actual payment.

5. The appellant supplied raw materials for production, and the goods produced were returned for use in manufacturing other goods falling under the Central Excise Tariff Act. The Department contended that the appellant did not prove the payment of excise duty by the manufacturer.

6. A certificate from the manufacturer indicated that they had discharged or would discharge the excise duty liability for the final products. This certification was considered sufficient to meet the requirements of the notification dated 1 March 2005. The Appellate Authority's decision was deemed unjustified as the manufacturer was responsible for the excise duty payment.

7. The Tribunal found that the certificate provided by the manufacturer fulfilled the conditions of the notification, and the appellant was not required to prove the actual payment of excise duty by the manufacturer. Consequently, the order of the Appellate Authority was set aside, and the appeal was allowed.

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