2017 (5) TMI 885

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....d packing services to M/s.Tafe Motors formerly known as Eicher Tractors. 2. The dispute in the present case relates to service tax liability under the category of "Packaging Activities" in terms of Section 65(76)(b) of the Finance Act, 1994. The appellants are engaged in packing parts of tractors viz. "bumpers". 3. During the course of argument, the ld. Counsel for the respondent brought to our notice that they have filed an appeal against the impugned order and the said appeal was decided by the Tribunal vide Final Order No.55944/2016 dated 16.12.2016. In the said order, the Tribunal held that the appellants are liable to service tax for the activities of "packing" in terms of the above statutory provisions. It was further concluded ....

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.... examined this issue specifically. The respondents raised bills for an amount of cost incurred in purchase of various items supplied to M/s. Eicher. The Commissioner (Appeals) examined the purchase bills and bills raised by the respondents. He recorded that the respondent shown the cost and an amount of 10% for supply of goods. He held that since these supply involve sale with profit of 10%, the said activity cannot be covered for service tax liability. We are in agreement with the said findings. Regarding waiver of penalties, in terms of Section 80, the reasons recorded by the Commissioner (Appeals) are as below:- "There is a provision for not imposing any penalty if the assessee proves that there was a reasonable cause for the said fai....