TaxTMI 
TaxTMI 
2025 (10) TMI 733
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.... M/s Eastman Auto and Power Ltd, on job-work basis; the appellant paid service tax on the activity undertaken, under the impression that the activity does not amount to manufacture. On re-examination of the issue, the appellants opined that the activity amounts to manufacture and hence, no service tax is payable; accordingly, the Appellants filed a refund claim on 20.06.2017, for Rs.44,23, 052, which came to be rejected by the original authority. The impugned order upheld such rejection. Hence, this appeal. 3. Shri R K Hasija & Shri Shivang Puri, Learned Counsels for the appellants explain the process of charging the batteries; the dry batteries supplied by M/s Eastman Auto and Power Ltd are kept in water tubby, filled with electrolytic liquid; the batteries are connected to each other in a series and finally to charging points (Jar Formation Process); the charging status of each battery and the level of the electrolytic liquid are checked periodically; after charging is complete, the batteries are passed though drying and washing, by the machines; after drying, the vent plugs of the batteries are tightened to avoid leakage; after, terminal clearance by scrubber brush, tilting t....
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....ell settled that burden of proof lies on the person who alleges; the appellant having paid the service tax under mistaken notion of law is eligible for refund; the appellant has not recovered the tax paid from their customer M/s Eastman Auto and Power Ltd, who did not pay the same; The Chartered Accountant Certificate confirms that the appellant did not recover the same. 6. Learned Counsels submit without prejudice to the above, that the definition of manufacture under Section 2(f) includes any process incidental or ancillary to the completion of a manufactured product; the same was reiterated in CBIC Letter F. No. 4/3/2006-CX. I dated 16.6.2006; there is no cumulative condition that such a process should be additionally mentioned in the Chapter Notes and Section notes; Tribunal held, in Jindal Stainless Steel Way Ltd 2014 (310) ELT 194 (Tri - Mumbai), that there is no word 'and' between Section 2(f)(i) and 2(f)(ii) as clarified by CBIC Letter F. No. 4/3/2006-CX. I dated 16.6.2006. 7. Learned Counsels submit that it was wrong on the part of authorities to rely on Milton Plastic Ltd 2008 (232) ELT 653 (Tri. Bom.) to contend that where the price remains the same during ....
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....the ground that the activity undertaken by the appellant amounts to manufacture and that any activity which amounts to manufacture falls under the negative list under Section 66D of the Finance Act, 1994 and therefore no Service tax is payable on such activity. 8. Learned Authorised Representative takes us through the provisions of Section 11B(1), 11B(2), 129A) and 12(B) of the Central Excise Act,1944 and submits that a claimant is eligible for refund claim of Central Excise Duty only if the said Claimant has borne the incidence of such Central Excise Duty; further, the burden to prove that tax incidence has not been passed to the buyer is on the claimant; this restriction is known as the bar of Unjust Enrichment; as such, for any refund of duty thereof the burden is also cast on them to establish that the duty so paid has not been collected from the buyer; the above provisions create a rebuttable presumption that every person who has paid excise duty has passed on the same to the buyer of such goods. He submits that the invoices categorically show that the amount of service tax is charged by the appellant from the principal manufacturer; the certificate dated 15.05.2017 of Char....
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....r the very first time at the stage of final hearing, which is impermissible in law. 11. Learned Counsel submits that it is a settled principle of natural justice that no party can be taken by surprise by the introduction of a new contention at the appellate stage without the same being part of the pleadings or issues framed before the lower authorities; Revenue cannot be permitted to raise such issues at a belated stage, particularly when such issues were neither made part of the Show Cause Notice nor dealt with in the Impugned Order; Hon'ble Supreme Court in Mohinder Singh Gill v. Chief Election Commissioner, AIR 1978 SC 851, has enunciated the principle that an order has to stand or fall on the reasons contained therein and cannot be supplemented by fresh reasons or justifications subsequently advanced by the authorities; the validity of an order must be judged by the reasons recorded in the order itself, and not by what may be urged later in defence of the order; Principal Bench followed this principle in the cases of Ingram Micro Indian Pvt Ltd 2023(383) ELT 204 (Tri. Del) and in Umed Club 2025(6) TMI 188-CESTAT New Delhi, which were further followed by Tribunal in M/s ACME ....
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....eir goods on payment of duty whether the same shall be treated as reversal of Cenvat Credit or not. 7. Following activity has been undertaken by the appellant on semi finished/incomplete/unformed batteries as under : (a) Receipt of semi finished and unformed batteries. (b) Electrolytic filling (c) Jar formation process (d) Test to check whether there is any leakage or not, and thereafter sealing the same and sold on payment of duty. 8. We have seen the process undertaken by the appellant and also gone through the section Note 6 of Section 16 of the Central Excise Tariff Act, 1985 which is reproduced here as under : "In respect of goods covered by this section, conversion of an article which is incomplete or unfinished but having the essential character of the complete or finished article (including 'blank' that is an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into a finished article or a part), into complete or finished article shall amount to 'manufacture'." 9. Semi finis....
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....he case of B.T India in the context of service tax only; the decision of the Hon'ble Delhi High Court has been approved by the Hon'ble Supreme Court referring to their lordship's decision in the case of ITC Ltd. Therefore, we find that the decision of the Larger Bench in the case of Balaji Warehouse (supra) has been indirectly not accepted by the Hon'ble Apex Court. 17. However, learned Counsel for the appellants vehemently opposes the Department's contention on the basis of B.T India and ITC Ltd. (both supra) stating that the Revenue cannot take up the stand for the first time during the hearing before the Bench as the issue was not raised either in the show cause notice or in the impugned orders. We find that Principal Bench in the case of Ingram Micro Indian Pvt. Ltd. - 2023 (383) ELT 204 (Tri. Del.) relying on the Hon'ble Supreme Court's decision in the case of Mohinder Singh Gill - AIR-1978-SC-851 held as under: 29. It is not possible to accept this contention for the simple reason that an executive IP Phone does not match the description of any of the apparatus mentioned in (G). Even otherwise, in view of the decision of the Supreme Court in Mohinder Singh Gill v.....