Manufacture by electroplating excluded job-work activity from Business Auxiliary Service and service tax liability

Electroplating of automobile filter components on a job-work basis was treated as manufacture, applying the Tribunal's view and the relevant note to Section XVI. As the process constituted manufacture, the activity fell outside Business Auxiliary Service and did not attract service tax. The assessee was therefore not liable to pay service tax on the electroplating activity.

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Issues: Whether electroplating of automobile filter components on job-work basis amounted to manufacture so as to exclude the activity from Business Auxiliary Service and negate service tax liability.

Analysis: The activity of electroplating was held to be manufacture. The Tribunal followed its earlier view that electroplating, including in the light of the relevant section note to Section XVI, results in manufacture. Once the process amounts to manufacture, the statutory definition of Business Auxiliary Service does not fasten service tax on the activity.

Conclusion: The assessee was not liable to pay service tax on the electroplating activity.

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