2015 (6) TMI 659

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....ntral Excise Department for manufacture of excisable goods falling under Chapter 29 of Central Excise Tariff Act, 1985. On scrutiny of the records, departmental officers noticed that during the period 10/09/2004 to 28/02/2005 appellant had received some amount towards job-work charges and processing charges. It revealed that the appellant carried out job-work on the goods supplied by the client and the same were returned back to the client after processing, without payment of any duty being job-work carried out by the appellant for which appellant received an amount as a consideration. The Revenue's contention is that the said amount is a consideration on which service tax liability arises under the category of 'Business Auxiliary S....

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....x liability on the appellant is totally baseless. He would take us to the definition of 'Business Auxiliary Services' and submit that the said definition clearly excludes any activity that amounts to manufacture within the provisions of Section 2(f) of the Central Excise Act, 1944. He would also take us through the chemical formula of the inputs as well as the finished goods. It is his submission that the impugned order be set aside. 5. Departmental Representative, appearing for the Revenue, on the other hand, would submit that the appellant is processing goods on behalf of his clients and is not discharging the Central Excise duty. Hence, he is correctly charged with non-payment of service tax liability. He reiterates the findings....

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....edit Rules. The said sub-rule mandates for movement of duty paid inputs on which CENVAT credit is availed, for further processing in to intermediate product outside the factory premises and receiving them back for further consumption. We find from records that the principal manufacturer had clearly intimated the Department as to the intention of getting the part of the process done from the appellant. This activity of processing in the appellant's factory premises is definitely an activity of 'manufacture' inasmuch as, the finished goods coming into existence after processing are different from the inputs which are put into use. 10. Secondly, we find strong force in the contentions raised by the appellant that when there is a c....