TaxTMI 
TaxTMI 
2025 (12) TMI 878
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....acts of the case are that The appellant is a company engaged in the development, manufacture, and marketing of pharmaceutical products. It is duly registered under the Central Excise Act, 1944 as a manufacturer and under the Finance Act, 1994 for compliance with service tax provisions. 2.1 The appellant manufactures both on its own account and also undertakes job work for its principal manufacturer, Cipla Ltd. Under such arrangement, Cipla Ltd. supplies raw materials and packaging materials, and the appellant undertakes processing and manufacturing strictly in accordance with Cipla's specifications. The finished goods are cleared from the Appellant's factory on payment of applicable Central Excise duty, supported by statutory ER-1 ....
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....called "service income" in audited financials was in fact conversion/job work charges received from Cipla Ltd., squarely covered under the definition of "manufacture" in Section 2(f) of the Central Excise Act, 1944. (ii) In terms of Section 66D(f) of the Finance Act, 1994, "any process amounting to manufacture or production of goods" is covered in the Negative List and thus not liable to service tax. (iii) All RCM liabilities were duly discharged, as evident from challans and ST-3 returns. (iv) No specific taxable service was identified in the SCN or in the impugned order, rendering the demand unsustainable. (v) Invocation of extended period was unwarranted since all figures were taken from statutory reco....
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.... - CESTAT Ahmedabad], Midas Care Pharmaceuticals v. CCE, Aurangabad [2010 (1) TMI 247 (Tri.-Mum)] & Alkyl Amines Chemical Ltd. v. CCE, Pune-III [2015 (6) TMI 659 - CESTAT Mumbai]. 4. On the other hand, the ld.A.R. for the Revenue submits that as the appellant did not provide the agreement between the Cipla and the appellant, therefore, it cannot be come out whether the appellant is a job worker of Cipla Ltd. for clearing the goods or not ? Therefore, the impugned demand was confirmed. 5. Heard both the parties and considered the submissions. 6. We find that it is a fact on record that the appellant is manufacturing medicaments on behalf of Cipla Ltd. under a contractual agreement wherein raw materials were supplied by Cipla and the....
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....received as labour charges (for such production of exempted goods)" From the above facts stated in the show cause notice it is not under dispute that the activity of manufacturing of drugs on behalf of the principle is an excisable activity in terms of Section 2 (f) of Central Excise Act, 1944. The demand was confirmed on the very same activity under the category of Business Auxiliary Service and sub head "production of goods on behalf of the clients". The definition of Business Auxiliary Service under clause (19) of Section 65 of Finance Act, 1994 reads as follows: - "(19) "business auxiliary service" means any service in relation to,- (i) promotion or marketing or sale of goods produced or provided by or b....
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.... production of goods on behalf of the client. From the definition it is absolutely clear that all such production activities which are other than the activity of manufacture in terms of Section 2 (1) of Central Excise Act. 1944 are alone shall be taxable activity under the head of production of goods on behalf of the client under Business Auxillary Service. Therefore, in the present case the activity admittedly amounts to manufacture of excisable goods ie., drugs which is clearly covered under Section 2 (f) of Central Excise Act, 1944 cannot be classified as taxable service under business auxiliary service. 4.2 We further find that the Revenue while demanding the service tax also taken the support from the exemption Notification No....