https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=768015 https://www.taxtmi.com/caselaws?id=768015 Process amounting to manufacture - process of drawing wire from wire rod - liability of appellant to pay Service Tax under the transportation of goods by road (GTA) service category when the vehicles were hired from local transporters who did not issue consignment notes - business auxiliary services. Business auxiliary service - HELD THAT:- From the definition of business auxiliary service , it is seen that if the activity undertaken by the appellant amounts to manufacture of excisable goods, then the said activity shall be excluded from the said definition. As the activity of drawing of wire from wire rod supplied by the customer amounts to manufacture , the services undertaken by the appellant do not fall within the ambit of the taxable service of business auxiliary service as defined under Section 65(19) of the Act. Thus, the job work undertaken by the appellant does not amount to business auxiliary services , as held in the impugned order. Consequently, the demand of Service Tax confirmed under this category is not sustainable and hence, the same is set aside. Demand confirmed under the category of GTA service - HELD THAT:- The appellant has hired vehicles from local vehicle providers who have not issued any consignment notes. Hence, they cannot be considered as goods transport agencies within the meaning of Section 65(50b) of the Finance Act, 1994. The liability of the appellant to pay Service Tax under the category of transportation of goods by road (GTA) service arises only when the appellant receives services from a goods transport agency who issues a consignment note, by whatever name it may be called. In these circumstances, the appellant is not liable to pay Service Tax under the category of GTA service in respect of the expenditure incurred by them for transportation of goods during the impugned period as the services were not received from a GTA who issues consignment notes - as the suppliers were not goods transport agencies within the meaning of Section 65(50b) of the Act as they have not issued any consignment notes, the services received by the appellant cannot be held liable to Service Tax under reverse charge mechanism at the hands of the appellant under the category of GTA service. Accordingly, the demand of Service Tax confirmed under this category is not sustainable and therefore, the same is set aside. Interest and penalty - HELD THAT:- As the demands confirmed against the appellant do not survive, the question of demanding interest thereon or imposing penalties does not arise. Conclusion - i) As the activity of drawing of wire from wire rod supplied by the customer amounts to manufacture , the services undertaken by the appellant do not fall within the ambit of the taxable service of business auxiliary service as defined under Section 65(19) of the Act. ii) Service tax under the GTA category requires issuance of consignment notes by a goods transport agency. The impugned order is set aside - appeal allowed. Case-Laws Service Tax Thu, 27 Mar 2025 00:00:00 +0530