TaxTMI 
TaxTMI 
2025 (5) TMI 1824
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....r which GCPL shall provide the raw material and technical know-how and the required plant and machinery. 2.2 Some of the relevant terms of the Agreement entered intoare provided below: (i) GCPL would provide the raw material, technical know-how and the required plant and machinery. (ii) All the raw materials and packing materials in respect of the products will be entirely provided by GCPL to Colortek. (iii) GCPL would have the right to reject goods manufactured in the factory by the Appellant not meeting their quality specification. (iv) The Appellant would be paid mutually agreed price / earnings for conversion of products made against the orders made by GCPL. 2.3 In accordance with the agreement, the Appellant undertook manufacturing activity and issued periodical invoices on GCPL charging for their activity in terms of per piece basis. 2.4 An audit was conducted during the relevant period and vide audit observations dated 21.03.2014 and 26.06.2014 it was observed that M/s. Colortek was engaged in the supply of Business Support Services to GCPL and thus liable to discharge service tax on the same. 2.5 Subsequently, the underlying S....
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....clearance of goods from factory. 3.2 Thus, it is further submitted that since the instant issue involved in the appeal has been settled by the Hon'ble CESTAT Kolkata, thus, the impugned Order demanding service tax on the activities undertaken by the Appellant is liable to be set aside. 3.3 As per the agreement, the appellant is engaged in manufacturing of goods for GCPL, where GCPL is responsible to provide the technical know-how, plant and machinery, raw materials and packaging material. The Appellant is required to undertake manufacturing activity. GCPL has the right to reject all such goods which do not meet the quality specifications. 3.4 He further submits that the appellant is not providing any service but is engaged in manufacturing activity. In respect of a similar agreement entered into with M/s Winsor Fashion Pvt. Ltd., the Ld. Additional Commissioner vide the following orders held that service tax is not payable on manufacturing activity being carried on by M/s. Winsor Fashion Pvt. Ltd. These orders were not challenged by the Department and hence have attained finality - (i) Order-in-Original No. 07/ADDL.COMMR./ST/2006 dated 30.11.2006 (ii) Ord....
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....ption provided vide Notification No. 8/2005-ST dated 01.03.2005 for the period prior to 01.07.2012 and Sl. No. 30(c) of Notification No. 25/2012-ST dated 20.06.2012 for the period post 01.07.2012. Such notification exempts payment of service tax on production or processing of goods which does not amount to manufacture, provided that applicable excise duty is finally paid by the principal manufacturer. Therefore, the impugned order confirming the demand of service tax is liable to be set aside on this ground alone. 3.11 Vide the impugned order, the Department has confirmed the demand of service tax under Business Support Services ('BSS') by stating that the Appellant is engaged providing infrastructural support services. However, as already submitted above, the Appellant is undertaking manufacturing activity for GCPL. 3.12 In the positive list regime, the manufacturing activities were specifically excluded from the ambit of 'Business Auxiliary Services'. By no stretch of imagination, an activity excluded from the ambit of 'Business Auxiliary Services' during the positive list regime, would impliedly fall within the ambit of Business Support Services in the negative list regime....
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....d the essence of the agreement by referring to the substance over its form. 3.19 Thus, it is humbly submitted that the demand of service tax is liable to be set aside on this ground alone. 3.20 The impugned order has confirmed the demand by invoking the proviso to Section 73(1) of the Finance Act, 1994. However, the Department has failed to bring to light any positive act on part of the Appellant while invoking extended period. Therefore, without prejudice to the aforementioned submissions, the demand for extended period is liable to be set aside and only the demand should be limited only to the normal period of limitation. 3.21 In addition to the above, it is a trite law that the extended period cannot be invoked where the demand is revenue neutral. Reliance in this regard is placed on the following: (i) Universal Dredging & Reclamation Corpn. Ltd. v. Commr. of CGST & CE., Madurai, 2021 (44) G.S.T.L. 401 (Tri. - Chennai) (ii) Reliance Ada Group Pvt. Ltd. v. Commr. of ST, Mumbai-IV, 2016 (43) S.T.R. 372 (Tri. - Mumbai). Therefore, the demand till the period September 2012, being barred by limitation ought to be set aside. 3.22 In accordance with the....
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....ey are registered by the Department for the manufacture of excisable goods viz. home insecticides in the said registered premises. Apart from the central excise registration, they are also found to be holding the licenses required to undertake manufacturing activity from various statutory bodies like the local Agriculture Department, Factory Department, Pollution Control Board, Sales Tax Department, Provident Fund and Employees State Insurance authorities etc. As such, there is no dispute that Godrej Sara Lee is the declared and licensed manufacturer of goods at the premises which fact has also been acknowledged by the Central Excise Department by issuing a registration certificate. However, it is found that Godrej Sara Lee entered into an agreement on 25.04.01 with the service provider whereunder it has been mutually agreed, interalia, that the manufacturing unit set up together in the premises of service provider would manufacture finished products using the brand name of Godrej Sara Lee as per the quality standards and specifications of Godrej Sara Lee. The agreement also details the obligations and rights of both the parties to the agreement which hare not detailed here for the....
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....d and concluded the said activities to be merely extension of "support services" to assist Godrej Sara Lee to undertake manufacture of goods. However, I find that the notice has noticeably failed to distinguish and clarify the particular activity under-taken by Godrej Sara Lee which amounted to 'manufacture' of goods when it is simultaneously acknowledged in the notice that the service provider is infact, undertaking "manufacturing, processing and packaging of goods". Therefore it is evident that though Godrej Sara Lee is a registered and licensed manufacturer, actual manufacture is undertaken by the supporting manufacturer. In this context the activity of service provider cannot be termed to be of merely a provider of support service, instead they turn out to be the 'defacto' manufacturer. In the process, one is led to the inevitable conclusion that the process undertaken by the provider of service being manufacture undertaken at the instance of Godrej Sara Lee, they cannot be termed to be a mere provider of "auxiliary services" which are liable to service tax. Instead, liability to tax under the Central Excise Law is to be discharged by them. This is supported by the Board's circ....
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....operation arrangement with GCPL in October 2016 and started paying services tax under the head Business Support Services. For the period from April to September 2016, I find that the service provided by the said Noticee to GCPL falls under the Negative List. I refrain from dwelling further on this service as the demand for this period is time barred. " 11. As the activity undertaken by the appellant is identical which amounts to manufacture, in that circumstances, the appellants are not liable to pay Service Tax on their activity as the manufactured goods has suffered excise duty at the end of the principal. In that circumstances, we do not find any merit in the impugned orders. The same are set aside. In the result, the appeals are allowed with consequential relief, if any." 7. We find that in this case also, the facts are similar to the case of M/s Winsor Fashion Private Limited (supra). The invoices raised by the appellant are similar to M/s Winsor Fashion Private Limited (supra). For better appreciation of facts, an invoice issued by the appellant is extracted below : 8. Therefore, we find that as the issue is more res-integra in view of the decision of the Tribu....