TaxTMI 
TaxTMI 
2021 (10) TMI 626
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by M/s Fine Electro Coating, the applicant, are as under:- 2.1 The applicant is engaged in rendering premium CED Coating and Powder Coating services. The firm also undertakes metal finishing coating services for various products and further offers (a) CED Coating for Metallic Components & auto parts (b) Coating on General Industrial equipments etc. Process followed by the company for CED Coating and Powder coating: CED Coating (Cathodic Electro Deposition): 2.2 Firm receives products (e.g. vehicle part, machine part, compressor part etc) from its customers through Delivery challan only; with the help & use of Machines, all the parts goes through Phospheting Treatment (PT Line- which helps mainly to clean the part and then it goes through Catholic Electro Deposition (CED Line) for final coating - CED c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unit of the same company, having different registration from that of the supplying unit, the unit undertaking the processing activity can be treated as a job worker. * Here the firm is involved in the processing or treatment such as CED/Powder coating on goods belong to others classifiable as job worker. 2.8 Hence, Service of job worker is classifiable under Chapter Heading 9988 (Manufacturing service on physical inputs (goods) owned by others-Original SAC Code used by the firm is - 998898. 2.9 Further as per Recent Notification issued by the Ministry of Finance - Notification No.20/2019 along with Press release, GST rate on job work services has been reduced to 12% from 18% such as supply of Machine job work in engineering industry except supply of job work in relation to bus body building which would remain at 18%. 04 HEARING 4.1 Preliminary hearing was held on 25.02.2020. The authorized representative of the applicant made submissions in respect of admission of their application. The jurisdictional officer was also present and had no objections to admission of the application, 4.2 The application was admitted and Final Online hearing was held on 21.09.2021. The Authorized....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ainting which is actually happening in the subject case as per the submissions made by the applicant. 5.5 According to the applicant's oral submissions also, during the course of the online hearing, the process undertaken by them only increases the life span of auto components parts, etc. We have perused the process undertaken by the applicant as submitted, and have been shown a demo during the course of online hearing which was conducted on 21.09.2021. We find that no new products emerges after the subject process been carried out by the applicant. The basic characteristics of the product have not been lost. Thus, in view of the contention of the applicant that they are a jobworker, we now discuss the specific issue hereon. 5.6 Job work is just a process undertaken by a job worker on goods belonging to a principal. Job work may or may not amount to manufacture. Further, a job worker may or may not use some portion of his material. Job work has been defined under section 2(68) of the CGST Act, 2017 to mean 'any treatment or process undertaken by a person on goods belonging to another registered person and the expression job worker" shall be construed accordingly'. 5.7 Whereas th....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., 2017. Thus, in view of the above we find that, the applicant is only a job worker and as a job worker, carries out processes on goods supplied by its principals. 5.13 The relevant provisions of Notification No.11/2017-Central Tax Rate dated 28.06.2017, as it existed prior to 01.10.2019 is as under:- SI.NO. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent) Condition (1) (2) (3) (4) (5) 26 Heading 9988 (Manufacturing services on physical inputs (goods) owned by others) (i) Services by way of job work in relation to- (a) Printing of newspapers; (b) Textile yarns (other than of man-made fibres) and textile fabrics; (c) Cut and polished diamonds; precious and semi-precious stones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975); (d) Printing of books (including Braille books), journals and periodicals; (e) Processing of hides, skins and leather falling under Chapter 41 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Explanation.- "man made fibres" means staple fibres and filaments of organic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Schedule to the Customs Tariff Act, 1975 (5 1 of 1975), except dog and cat food put up for retail sale falling under tariff item 23091000 of the said Chapter; (h) manufacture of clay bricks falling under tariff item 69010010 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975);"; '(i) manufacture of handicraft goods. Explanation. - The expression "handicraft goods" shall have the same meaning as assigned to it in the notification No. 32/2017 -Central Tax, dated the 15th September, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1158 (E), dated the 15th September, 2017 as amended from time to time.'. 2.5 "(ia)Services by way of job work in relation to- (a) manufacture of umbrella; (b) printing of all goods falling under Chapter 48 or 49, which attract CGST @ 6per cent 6 "(ib) Services by way of job work in relation to diamonds falling under chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975); 0.75 (ic) Services by way of job work in relation to bus body building; 9 (id) Services by way of job work other than (i), (ia), (ib)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tral Excises and Salt Act, 1944, namely Union of India v. Delhi Cloth and General Mills Co. Ltd. (1977 (1) E.L.T. 199), an important distinction was made between manufacture and processing. It was held that processing and manufacture are distinct concepts in law and only such processing as results in a transformation, namely, that a new and different article emerges having a distinct name, character or use, that Excise duty, which is only on manufacture, can be levied 21. On the facts of the present case, we have first, therefore, to arrive at whether there is "manufacture" at all and only subsequently does the question arise as to if this is so, what is the valuation of the processed goods and whether duty is payable upon them. We have found on facts that for the purposes of the proviso to Rule 57F (2), the inputs that were not ultimately used in the final product but were removed from the factory for home consumption remain the same despite ED coating and consequent value addition. We follow the law laid down in S.R. Tissues Pvt. Ltd's case and state that on account of mere value addition without more it would be hazardous to say that manufacture has taken place, when in fact, it....