TaxTMI 
TaxTMI 
2022 (3) TMI 105
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....as proposed in the Show Cause Notice dated 21st October 2016 has been dropped. 2. Briefly stated, the facts of the case are that the Respondent inter alia manufactures excisable goods namely biscuits classifiable under Chapter 19 of the Central Excise Tariff Act, 1985 (in short 'Tariff'). An investigation was conducted by the DGCEI (now DGGI) wing of the Department as regards non-payment of service tax under Reverse Charge Mechanism by the Respondent on the services received from various contractors engaged in packaging of its finished goods to whom payments were made on the basis of quantity of biscuits packed during the month. After the process of investigation was done, the Respondent was issued with a Show Cause cum Demand Notice dated....
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....Adjudicating authority has merely dropped the demand on the ground that the process of packaging of biscuits amounts to manufacture and thus the same is an exempted service, however he has not taken into account the conditions as prescribed in Circular No. 190/9/2015-ST dated 15/12/2015 for satisfying the conditions of job work. He thus relied on the grounds of appeal filed by the Department. 4. Shri Ankit Kanodia, learned Advocate, appeared on behalf of the Respondent. He contended that the order of the learned Adjudicating authority is a detailed order covering all aspects and the learned Commissioner has rightly dropped the demand of Service Tax as in the present case the contractors were appointed for carrying out a manufacturing proce....
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....der of the learned Adjudicating authority should be upheld. 6. Heard both sides through video conferencing and perused the Appeal records. 7. The issue to be decided in the present Appeal is whether the activity performed by the contractors appointed by the Respondent is 'Supply of Manpower Services' or is a process amounting to manufacture leading to an exempt service under section 66D of the Finance Act, 1994. 8. We have gone through the agreements entered into with the contractors by the Respondents, relevant portion of which are as below: " The Agent shall carry out packing of biscuits, cakes and cookies. The Agent shall comply with all the procedures, specifications, standard and other instructions as prescribed by the company fro....
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.... (iii) Which, in relation to the goods specified in the Third Schedule involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including declaration or alteration of RSP on it or adoption of any other treatment on the goods to render the product marketable to the consumer. The notes to Chapter 19 of the Central Excise Tariff Act states in para 5 as- "in relation to the products of this chapter, labelling or relabelling of containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture." Thus by a combined reading of the meaning of the term 'manufacture' read with the notes to cha....
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....s carried out job work on behalf of their client, i.e., conversion of Aluminium Ingots to Aluminium Castings. The charges for the job work are based on the quantum of production and not against supply of manpower. Therefore activity remains as production on behalf of the client in the factory of the client. In this fact though the appellant was deputing the manpower but services which carried out were job work in the client's factory, the said activity amounts to manufacture, hence, does not fall under category of Manpower Recruitment Services." 12. We also find that the CBIC Circular 190/9/2015-Service Tax dated 15.12.2015 has also explained the conditions when one service can be interpreted as manpower supply or job work. In the given c....