TaxTMI 
TaxTMI 
2026 (2) TMI 1009
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....he Revenue was of the view that such activity of the assessee is nothing but production or processing of goods on behalf of their clients. Therefore, the said activity is liable to leviable to service under the category of "Business Auxiliary Service". 2.2 Accordingly, proceedings were initiated by issuing show-cause notice for the period 2013-14 to 2016-17 and the matter was adjudicated. The demand of service tax was confirmed under the category of "Business Auxiliary Service". 2.3 Aggrieved with the said order, the appellant is before us. 3. The Learned Counsel submits that the issue has been settled in their own case by this Bench vide Final Order No. 76648/2023 dated 11.09.2023 (Appeal No. ST/305/2011). The earlier dispute pertained to the year 2005-06 to 2009-10. The facts are identical and the period in this appeal for the period 2013-14 to 2016-17. 4. On the other hand, the ld. A.R. for the Revenue reiterated the findings of the impugned order. 5. Heard both the parties and considered the submissions. 6. We find that the said issue came up before this Tribunal in the case of Ferro Scrap Nigam Limited (supra), wherein this Tribunal has observed as under : ....
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....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 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 b....
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....ient 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 discussed above, it cannot be said that appellants 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 is allowed". Further, in the case of Ratho....
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..... 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 : 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 appro....