TaxTMI 
TaxTMI 
Packing activity (job work) - Applicability of service tax under (i) Business Auxiliary Service or (ii) Packaging Service.
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....acking activity (job work) - Applicability of service tax under (i) Business Auxiliary Service or (ii) Packaging Service. <br>News and Press Release<br>Dated:- 12-2-2008<br><BR>Issue involved: The appellant were were engaged in rendering services, inter alia, of job work/production of goods on behalf client. Nature of service was: "The compressed gas was supplied in bulk in gas tankers by HPCL w....
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....hich was unloaded in big tankers in the bottling plant and gas drawn there from was compressed to the same pressure for the purpose of refilling it in small HPCL cylinders." Department has confirmed the service tax under business auxiliary service category. Whereas the appellant has contested the stand of department and argues that since the packing service was brought into tax net with effect fr....
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....om 16-6-2005, the same should be taxable under new category. Findings and Decision: Ld. Commissioner (Appeals) has held that: "As the name of the services suggests "Packaging" implies packing of some goods which are already in existence. As the above definition would reveal that the exclusion clause in these services is that if "Packaging activity" amount to manufacture within the definition un....
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....der Section 2(f) of the Central Excise Act, 1944, the same would not be liable to service tax. The word "packaging" in its plain meaning does not imply the manufacture/production of goods, but by virtue of Chapter Notes such activity i.e. Packaging has been covered as amounting to manufacture in respect of some commodities in the Central Excise Tariff Act. Thus it will be seen that "Packaging acti....
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....vity" which includes bottling also generally do not amount to production of goods. This being the position, it is to be seen if such activity can be covered under the category "Business Auxiliary Services" as production of goods by the appellants on behalf of their clients ………………. And as such confirmation of demand of service tax under the category "Business Auxiliary Services" cannot....
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.... be sustained" For full text of judgment - Visit 2008 -TMI - 2924 - COMM. (A) Also see: - Service Tax Ready Reckoner Business Auxiliary Service Packing Services<BR> News - Press release - PIB....