AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 1581
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....HANDRAPA B NAGARAJ K YASEEN KHAN MAHABOOB SAB ZAFER ALI KHAN SHEIK RASOOL SAB VERSUS COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, BANGALORE-IV, COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, MYSORE, COMMISSIONER OF SERVICE TAX, BANGALORE, COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, BANGALORE-II For the Appellant : Mr K Parameswaran, Adv For the Respondent : R Gurunathan, AR ORDER Per Archana Wadhwa All the appeals are being disposed of by a common order as the factsinvolved in each and every appeal are more or less identical.All the appellants are contractors of M/s Mysore Paper Mills Ltd. which is a State Govt owned undertaking, engaged in the manufacture of various kinds of paper including newsprint. The said M/s Mysore Paper Mills Ltd issued tender notifications calling for tenders from various contractors for thepurpose of felling, conversion, debarking, collection, stacking, transportation and delivery of pulp wood from the captive plantation of the said M/s Mysore Paper Mills Ltd. As a result of such tender invitations, various contractors were appointed by the said M/s. Mysore Paper Mills Ltd for doing the above jobs. The appell....
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....he service tax liability in respect of the very same service. Revenue has not filed any appeal against the said part of order of Commissioner (Appeals). 5. Learned advocate Shri K. Parameshwaran appearing for the appellants has drawn our attention to the definition of business auxiliary service as also to the fact that the activities undertaken by them cannot be held to be amounting to "processing of the goods" inasmuch as, they simpliciter cut the trees and debark them and after further cuttings transported the same. In any case, he assails the impugned orders on the point of limitation and further submits that the definition of business auxiliary service itself excludes the activity if the same amounts to manufacture in terms of clause 2 of Section 2 (f) of the Central Excise Act. By drawing our attention to Chapter 44 of the Central Excise Tariff Act, he submits that inasmuch as there is a change in the name, character and use of the final product, which is different from the starting material, the activity may amount to manufacture, in which case it would be exempted from payment of duty of excise in terms of Notification No 3/2005 dated 24.02.2005. Further, as the activity wo....
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....als) has granted relief on the said issue stands accepted by the Revenue and do not stand appealed against. 7. After considering the submissions made by both sides we find that the definition of business auxiliary service underwent amendment with effect from 16.6.2004. As the period involved is subsequent to the said amendment, we have to take into consideration amended definition. The amended definition of the business auxiliary service reads as under:- (19) "business auxiliary service" means any service in relation to (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services; which are inputs for the client; or [Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client;] [(v) production or processing of goods for, or on behalf of, the client;] (vi) provision of service on behalf of the client; or (vii) a service or auxiliary to a....
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....whereas manufacture implies a change but every change is not manufacture and it is only when a different article emerges with a distinct name, character or use, it can be held to be the result of manufacture. As regards processing, Hon'ble Supreme Court observed that -"processing essentially effectuates a change in form, contour, physical appearance or chemical combination or otherwise by artificial or natural means and in its more complicated form involves progressive action in performing, producing or making something ....." As already observed by us that the appellants are required to deliver the wood to their client in the shape of billets of the specified dimensions, it has to be held that the cut wood has undergone changes. 9. Whether such changes amount to processing or amount to manufacture is another question required to be decided inasmuch as learned advocate appearing for the appellant has taken a categorical stand before us that the said activity would amount to manufacture in terms of the provisions of Section 2(f) of Central Excise Act. If that be so, they would be outside the purview of service tax liability under the category of business auxiliary service itsel....
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....as scope of entertaining a doubt about leviability of the same. In any case, he submits that the fact of such contracts having been awarded by M/s Mysore Paper Mills was in the knowledge of the Revenue. In support of the above contention he draws our attention to an order passed by the Dy Commissioner of Central Excise in respect of Mysore Paper Mills for refund of service tax paid on GTA services. We have seen the said order being order-in-original No. 1299/2008. It stands held in para 5 of the said order that:- "I have gone through the records of this case and submissions made by the assessee during the Personal hearing. M/s MPM, Bhadravathi have placed work orders with different contractors for the extraction, collection, debarking, stacking along with transportation of ACASIA/eucalyptus pulp wood. The assessee has discharged the service tax liability on the cost of transportation of the pulp and has now approached the department for refund of the service tax paid on the transportation of the pulp on the ground that the work order is a composite contract and since they are not goods transport agency they are not liable to pay the service tax on the transportation of pulp." 1....