TaxTMI 
TaxTMI 
2025 (1) TMI 1785
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....at some of the services shown as 'Supervision and Dealing Charges'. Therefore, it was alleged that the services provided by the appellant for which they recovered/claim 'supervision and dealing charges' from their clients were services such as general liaison work, business promotion, providing information on competitive activity, follow up of payments and other related services which were provided to different clients as per terms and conditions of the contracts made with such clients. The consideration/commission received from these clients were shown as 'supervision and dealing charges' in their books of accounts during the years 2007-08 and 2010-11 and they were reportedly paying Service Tax on such income under the category of Business Auxiliary Service. It was further found that the appellant were also providing other clients and consideration received for providing such services was shown as 'Machining Charges' in the schedules to their financial statements during the relevant period. They were performing machining works like drilling, tappling, forming, threading etc. on diesel locomotive wheels as per the specifications of DSP for their various clients. Therefore, the proc....
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....he definition of Section 2(f) of CE as the activity amounts to manufacture. 7. In that circumstances, no Service Tax is payable by the appellant as in their principal M/s. Mohata Coal Company (P Ltd. vide final order no. 75473/2024 dated 06.03.2024 this Tribunal dropped the proceedings. Therefore, no proceedings is sustainable against the appellant. 8. Heard the parties. Considered the submissions. 9. Similar issue came up in the case of this Tribunal in the case of M/s. Mohata Coal Company Pvt. Ltd. wherein this Tribunal observed as under: "7. We find that the issue has already been examined by this Tribunal in the case of M/s. Ferro Scrap Nigam Limited (supra) wherein this Tribunal observed as under: - "7. We find that the issue already stands decided in favour of the assessee. For the period prior to 16.06.2005, the definition of BAS under Section 65(19)(v) of the Act, inter-alia, mean any service in relation to production of goods on behalf of the client. The Principal Bench in assessee's own case, as relied by the assessee, has already observed in identical set of facts that there is no third person in the instant case, whereas the tax can be lev....
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.... 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 to be interpreted in a manner that the activity results in production of goods. We may here observe that every production may not amount to manufacture but admittedly every manufacturing activity involves production of goods, inasmuch as the term manufacture" would include production though every production may not Include the manufacturing activity. Inasmuch as the Commissioner-in his order dated 21-9-2006 has held that the said 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 Id. 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. ....
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....nd 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 discussed above, it cannot be said thatappellants have undertaken job work on behalf of the clients, in view of the fact that there were only two parties to the transaction in this case, whereas where the production is on behalf of the clients, there would be three parties. Since, services undertaken by the appellants is not covered by the definition, no service tax is attracted. Accordingly, impugned order is set aside and appeal Further, in the case of Rathour Engg. Works 2012 (27) S.T.B. 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....
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....f 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 of production (or processing), subject to the condition that such production [or processing) does not amount to "manufacture" within the meaning of Clause (f) of Section 2 of the Central Excise Act, 1944 (1 of 1944). (ii) "appropriate duty of excise" shall not Include Nil" rate of duty or duty of excise wholly exem....