TaxTMI 
TaxTMI 
2023 (9) TMI 810
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed, for recovering, handling, transporting and processing of slag scrap mixture generated at the customers' steel plant as result of manufacturing processes at various stages like, blast furnace, SMS, raw material handling plant etc. 2.1 The processing of slag scrap mixture was undertaken for the purposes of obtaining iron and steel scrap from the said mixture by way of screening , magnetic separation etc.. Such activities do not amount to manufacture. 2.2 The said iron and scrap so obtained was to be handed over to the customers for further use in the manufacture of dutiable goods. 2.3 The obligations being discharged by the appellants under the contracts, the consideration charged for performing such obligations and the allegations made by the Department against the appellant for raising the disputed the demand of service tax is that under the category of Business Auxiliary Services upto 16.06.2005, the appellants were engaged in the activity of production and thereafter, it was alleged that the activity of the appellant amounts to processing, which is taxable under Business Auxiliary Service and not entitled for the benefit of exemption Notification No.8/2005 dated 01.0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d activity does not amount to manufacture and such order stands accepted by the Revenue, it has to be held that there was no production of goods. As such we agree with the ld. Advocate that the first criteria of the definition is not satisfied. 9. As regards second criteria that the said activity has to be "on behalf of the client", we find that the matter is no longer res integra and stand settled by various decisions of the Tribunal. Even the Board's Circular has clarified the same. For ready reference we may reproduce the relevant portion : Circular No. 137/111/2007-CX, dated 15-7-2007 "03. The matter has been examined by the Board. The view of the Board is that the incineration/shredding of bio-medical where can, by no stretch of imagination, be called as "processing of goods", even if in certain cases the shredded materials may be used as filters etc. Further, the activity also does not qualify to be called as provision of service on behalf of the client. This is because the taxable activity envisaged under this category of 'business auxiliary service' is that while the "client" is obliged to provide some service to a 3rd person but instead of the cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s allowed". Further, in the case of Rathour Engg. Works - 2012 (27) S.T.R. 37 (Tri.-Del.), the Tribunal held as under :- "6. The appellants carry out the process of grinding and smoothening the edges, called fettling of the rough castings, received from principal manufacturers who clear the goods after carrying out further processes. Since there is no dispute that this activity of the appellants does not amount to manufacture, it can only be called processing not amounting to manufacture, which was not taxable during the period of dispute. We also agree with the appellant's plea that as held by the Tribunal in cases of M/s. Auto Coats. v. CCE, Coimbatore (supra), M/s. Gedee Weiler Pvt. Ltd. v. CCE, Coimbatore (supra) and M/s. Sonic Watches v. CCE, Vadodara (supra) during the period of dispute, the wordings of Clause (v) of Section 65(19) of the Finance Act, 1994 did not cover processing of goods of job work basis which got covered by this clause, when the same was substituted by "production or processing of goods for, or on behalf of, the clients." In view of this, the impugned order is not sustainable. The same is set aside. The appeals as well as the stay applic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of [production or processing of goods for, or 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 [or processed] using raw materials or semi-finished goods supplied by the client and goods so produced [or processed] 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. Explanation. - For the purpose of this notification, - (i) the expression "production [processing] of goods" means working upon raw materials or semi-finished goods so as to complete part or whole....