2020 (2) TMI 111

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....they are doing powder coating by using their own chemical, powder coating: (1) De-greasing chemicals, (2) De-rusting Chemicals, (3) Crystal De-activation, (4) Phosphate Coating, (5) Chromodies Chemicals, (6) Spray Powder Coating of colour, (7) Packing Material etc. The appellants received the metal components under the cover of Annexure II Challans, which mentioned the supply under rule 4 (5) (a) of Cenvat Credit Rules, 2004. In this fact the case of the department is that the appellant is providing the service of Business Auxiliary Service under a specific head of production of goods on behalf of the client, accordingly the same is liable for Service Tax. The adjudicating authority has confirmed the demand by denying the exemption notifica....

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....CCE As regard the documentary proof regarding the payment of Central Excise duty by the Principal manufacturer, he submits that the appellants have received the metal components for job work under the cover of Annexure-II Challans, mentioning under rule 4(5)(a) of the Cenvat Credit Rules , 2004. The said documents clearly show that the Principal Manufacturers are paying Excise Duty. He submits that there is no condition in the notification for providing the proof of payment of duty by the Principal Manufacturers. He submits that as per the notification only it is to be established that the duty on final product is payable by the raw material suppliers. The Challan under rule 4 (5)(a) of Cenvat Credit Rules, 2004 is more than sufficient t....

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....tion or processing of goods for, or on behalf of, the clients," therefore, service tax prior to 16.06.2005 is not payable. In this regard he placed reliance on this Hon'ble Tribunal Decision in the case of Sonic Watches Ltd. Vs. CCE reported in 2011 (21) STR 34 (T). He also arguing on limitation submits that the demand for the period 10.09.2004 to 31.3.2008 is patently time barred. Since, the appellant had admittedly received the raw materials under Annexure -II Challans from their clients for job work under Rule 4(5)(a) of the Cenvat Credit Rules, 2004, the appellant was under a bonafied belief that they were not liable to pay service tax in terms of exemption Notification No. 8/2005-ST. Therefore, there was no suppression of fact or ....

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....hereby exempts the taxable service of production of goods on behalf of the client referred in sub-clause (v) of clause (19) of section 65 of the said Finance Act, from the whole of service tax leviable thereon under section 66 of the said Finance Act : Provided that the said exemption shall apply only in cases where such goods are produced using raw materials or semi-finished goods supplied by the client and goods so produced are returned back to the said client for use in or in relation to manufacture of any other goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as amended by the Central Excise Tariff (Amendment) Act, 2004 (5 of 2005), on which appropriate duty of excise is payable. ....

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....ial such as consumable if used by the job workers, whether same will amount to job work or otherwise. In the judgments cited by Learned Counsel it was held in the similar situation that even if some small part of raw material used by the job worker, the activity cannot be taken away from the purview of job work, the activity will still remain as of job work. Applying the same legal logic even though the powder coating chemicals were not supplied by the client of the appellant. It cannot be said that there is a violation of condition of Notification. We are also of the views that in every case of job work some or other small part of consumables/ raw materials are used by the job worker. In such case if it is contended that such small part of....

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....ant have received the goods under Annexure-II Challans indicating rule 4(5)(a) of Cenvat Credit Rules, 2004. It is sufficient to establish that the final product of the principal manufacturer is chargeable to excise duty. If at all the adjudicating authority is not satisfied with this evidence, it is up to him to cross verify with the concerned Central Excise Jurisdiction offices of the principal manufacturers that are paying excise duty. Therefore the finding in this regard given by the adjudicating authority is absolutely incorrect and not acceptable. As regard limitation we find that there are precedent judgments as cited by the Learned Counsel that in case the job worker received the goods for job work under Annexure-II Challans, the bo....