TaxTMI 
TaxTMI 
2024 (3) TMI 1166
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....d by the appellant under Rule 4(5)(a) of the CENVAT Credit Rules, 2004 and after carrying out the said process of machining, the appellant returned the processed goods to their principal namely, M/s. Durgapur Steel Plant. They further did the process of ultrasonic test, painting, etc., and thereafter, the goods were sold by the principal on payment of duty. 2.1 The Revenue is of the view that the activity undertaken by the appellant does not amount to manufacture; therefore, they are liable to pay Service Tax under the category of "business auxiliary service". 3. In these set of facts, proceedings were initiated against the appellant by demanding Service Tax on their activity and the matter was adjudicated wherein the demand of Service Tax came to be confirmed. Against the said order, the appellant is before us. 4. The Ld. Counsel appearing on behalf of the appellant submits that the issue has been settled by this Tribunal in the case of M/s. Ferro Scrap Nigam Limited v. Commissioner of C.G.S.T. & Excise, Bolpur [Final Order No. 75013-75014 of 2021 dated 19.01.2021 in Service Tax Appeal No. 37 of 2010 and anor. - CESTAT, Kolkata] wherein the said activity was held by this ....
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..... 5. As such, as seen from the above reproduced definition of BAS a service provider has to produce the goods on behalf of the client. As such two criterias are required to be satisfied before an activity can be brought under the service tax net falling under the above category. The first criteria relates to the production of goods and the second relates to the fact that such production has to be "on behalf of the client"................... 8. Having appreciated the submissions made by both the sides, we first of all note that there is no dispute on the detailed activity undertaken by the appellant vide which they separate the iron metal from the molten slag. As such we do not feel the need of referring the same, as the dispute does not revolves around the said activity, but relates to as to whether the said activity can be called as "production of goods" and further "on behalf of the client". As regards the expression "production of goods", we note that the same was amended in June 2005 and was substituted by the expression - "processing" of goods. As such it is clear that prior to the amendment and in the absence of the words "processing" the same has t....
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....ocessing of goods for, or on behalf of, the client". The condition that only such activities would be liable to service tax which do not amount to manufacture under Central Excise Law would, however, continue. 24.2 A point was raised whether "production of goods on behalf of the client" covers situations where the service provider undertakes job work for the client. In view of the amendment, production or processing (not amounting to manufacture) done either for the client or on behalf of the client would be liable to service tax". 10. Apart from the above circulars of the Board there are decisions of the Tribunal settling the issue at rest. In the case of Auto Coats - 2009 (15) S.T.R. 398 (Tri.-Chen.) it stands held that prior to 16-6-2005 unless a person was engaged by another for processing the goods entrusted by a third person, such activity would not be exigible to service tax. Similarly in the case of Sonic Watches Ltd. - 2011 (21) S.T.R. 34 (Tri.) it was held as under : "5. We find that activity undertaken by the appellants in this case was similar to the one as existed in the case of Auto Coats. Therefore, in the light of above two decisions discu....
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....is reproduced below: "9. Next we consider the liability for the period w.e.f. 16-6-2005. When we consider the definition in sub-clause (v) of Section 65(19) for the period prior to and subsequent to 16-6-2005, we note that for the later period, the definition has included processing of goods in addition to production of goods. The claim of the appellant is that the liability of service tax would stand extinguished through the Notification No. 8/2005-S.T., dated 1-3-2005. The lower appellate authority has denied the benefit of the said exemption to the appellant. For ready reference, we reproduce below the Notification No. 8/2005-S.T. ibid : "In exercise of the powers conferred by sub-section (1) of Section 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 : ....
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....on to such end-use certificate submitted by the Public Sector Undertaking, we are of the view that the appellant will be entitled to the benefit of Notification No. 8/2005, dated 1-3-2005. Consequently, we set aside the demand for service tax made in the impugned order and allow the appeal. 9. With regard to the demand raised on shifting, transportation, loading and unloading from one place to another inside the steel plant of the client itself, the Tribunal in their own case as reported in 2014 (1) TMI 1051- CESTAT-New Delhi has observed that :- "7. In any case, we have seen the decision of the Tribunal as upheld by Hon'ble High Court in the case of Modi Construction Co. vs. CCE, Ranchi (supra), it stands clearly held by the Tribunal that service of shifting, transportation or raw materials, waste materials, and finished products from one place to another, inside the plant itself, does not fall under the taxing category of Cargo Handling Services. The activities undertaken by the appellant are admittedly within the plant itself. As such, we find that the ratio of the law declared by he Tribunal in the above referred matter, which also stands upheld by the Hon'ble....