2008 (7) TMI 80

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....e impugned Order, has confirmed the demands of service tax of Rs. 1,99,91,835 and Rs. 3,49,55,798 together with interest and imposed equivalent penalties of Rs. 1,99,91,835 and Rs. 3,49,55,798 in respect of show-cause notices dated 6-6-2007 and 25-7-2007 respectively. The period involved is from 10-9-2004 to 30-6-2006 and 1-7-2006 to 30-6-2007 respectively. 2. Heard both the sides and perused the records. 3. The issue involved in the instant case is whether the activity of producing goods for or on behalf of others attracts service tax or not under the category of Business Auxiliary Service (BAS), which is defined as under: "2. (19) 'Business auxiliary service' means any service in relation to, - (i) to (iv)………………………....

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....e. The definition of BAS excludes the activity which amounts to the process of manufacture. Therefore, it is not            covered under the taxable service. In this connection, attention was drawn to the definition of manufacture under section 2(f) of the Central Excise Act, 1944 and section 2(f) of the MTP Act, 1955. The applicants contended that the meaning of the word 'manufacture' has been borrowed from the Central Excise Act in the provisions of service tax and, therefore, the meaning assigned to it under the Central Excise Act will be applicable to service tax as this legislation is by reference. Hence, irrespective of the fact whether the product is classified under the Central....

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....tax is pending before the Larger Bench of the Madhya Pradesh High Court. Therefore, similar waiver from pre-deposit of service tax and penalty may be granted in this case because of the matter being subjudice before the Larger Bench of the Madhya Pradesh High Court. 6. The learned J.D.R. on the other hand, contended that the Tribunal in similar facts and circumstances in the case of Rubicon Formulations (P.) Ltd. v. CC& CST has put Rubicon Formulations to terms in the matter of stay vide Order No. S/3/2/08 /CSTB/C-I, dated 10-6-2008. This Order of the Tribunal has got precedential value and there is no reason why different treatment should be imparted to this case. He also pointed out that the definition of manufacture as given in section....

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....ular party and supplied to that party, as per the contract. The applicants cannot use those specifications/brand names to produce the goods on their account. The applicants also cannot sell these branded goods in open market. Therefore, it is apparent that the applicants are producing goods for the client and are thus prima facie covered under BAS. The activity of production of goods in question does not amount to manufacture in the Central Excise Act, 1944 and these are covered under MTP Act, 1955. What is excluded from the definition of BAS is 'manufacture' within the meaning of Central Excise Act, 1944, which prima facie would mean that it is only manufacture of goods liable to Central Excise duty, which would stand excluded from the pur....