TaxTMI 
TaxTMI 
2026 (6) TMI 952
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....ments dated 23.03.2011 were executed by GCPL and the Appellant, for assisting and carrying out the manufacturing activities such as packing, re-packing, labelling, movement of goods inside shop floor, loading & unloading, gardening and housekeeping services, etc., on a piece rate basis. Some of the relevant terms of the Agreement entered into are provided below: (i) GCPL would provide the material, technical knowhow and required plant and machinery, to the Appellant (ii) GCPL would pay consideration to the Appellant on a piece rate basis. (iii) The Appellant would employ sufficient personnel to carry out the packing, re-packing, labelling, movement of goods inside shopfloor, loading & unloading, gardening and housekeeping services. (iv) GCPL would have the right to reject goods manufactured in the factory by the Appellant not meeting their quality specification. 2.2 In accordance with the agreement, the Appellant undertook manufacturing activity and issued periodical debit notes on GCPL charging for their activity in terms of per piece basis. A sample debit note is extracted below for ease of reference - 2.3 The said goods were cleared on p....
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....arly placed assessee carrying out processing activity for Godrej, this Tribunal set aside the demand of service tax, on the grounds that the invoice clearly showed that the consideration was charged on a per unit basis. He also relies on the decision of this Tribunal in the case of M/s Dragon Consumer Products Pvt. Ltd. v. CCE & ST, Guwahati - 2026 (2) TMI 966 - CESTAT Kolkata, wherein also it was held that service tax cannot be charged, in the case where the assessee was carrying out the processing and manufacturing activity for GCPL charging consideration on a per piece basis. 3.2 It is further submitted that the above decisions are squarely applicable to the appellant in light of the fact that the appellant had also undertaken a similar activity for GCPL with same modus operandi and similar clauses of the agreement. The Appellant is also employing their own labour and is charging from GCPL in terms of per piece basis. Further, excise duty has been duly discharged by GCPL undisputedly on the clearance of goods from factory. 3.3 It is further submitted that the instant issue involved in the appeal has been settled by this Tribunal and thus the impugned Order demanding servic....
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....6, therefore, the appellant cannot avail the benefit of the exemption Notification No.25/2012 dated 20.06.2012, that they are not the job-worker. Against the order of confirmation of demand of service tax, appellants are before us." and this Tribunal has observed as under : "8. We have gone through some of the clauses of the agreement placed before us which indicate that the manufacturer is GCPL/GSLL, but the said activity has been undertaken by the appellant, as appellants are having factory premises to manufacture the goods in question and raw material and machinery being provided by GCPL/GSLL, but manufacturing activity was undertaken by the appellant by employing their own labour and the appellant is charging from the GCPL/GSLL the charges of their activity in terms of per piece basis. For better appreciation of the facts, an invoice issued by the appellant No.1 on GCPL is extracted below:- 9. On going through the invoice issued by the appellant No.1, the appellant is charging price for goods manufactured by them in terms of quantity of goods manufactured. Moreover, labour has been employed by the appellant and by using their factory and manufactured the go....
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....s as are necessary to effectively carry out manufacturing operations. The details of the obligations on both sides appear to create a case where Godrej Sara Lee is the principal manufacturer and the service provider a supporting manufacturing undertaking the actual manufacture on account and as per the requirements of the principal manufacturer in the licensed premises of the latter. The agreement obligates the supporting manufacturer to carry out day to day operations and maintenance of the manufacturing plant set up by Godrej Sara Lee. An examination of the obligations of the supporting manufacturer evidences that they operate the plant and machinery to manufacture goods, by using employees of their own. In terms of further understanding mandated in the agreement, vide the letter of Godrej Sara Lee dated 14.05.04 to service provider, remuneration is made in the form of coil conversion rates for the quantity of goods produced by the supporting manufacturer at the rates agreed upon. Verification of the bills raised in this regard evidences that the charges have been made on the basis of the quantity of products manufactured and packaged and delivered to Godrej Sara Lee. This practi....
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....ax if production activity under-taken is covered within the meaning of the term "manufacture" under the Central Excise Act. In the instant case, a careful examination of the nature of relationship and the totality of the activities carried out in furtherance to the agreement reveals that the process of manufacture in the instant case is undertaken by the supporting manufacturer for Godrej Sara Lee and that, the activity undertaken by them amounted to manufacture as defined in Section 2(f) of the Central Excise Act, 1944 and the goods being chargeable to excise duty, and duty being discharged by the principal manufacturer, as per law, the said activity cannot be considered to be a taxable service under the category of "business auxiliary service" and accordingly is not liable to service tax. Therefore, I find that the charges made in the notice are not sustainable and the demand made therein is not enforceable." and dropped the proceedings. 10. Further, in appellant's own case for another period, again the issue was examined and on that basis the adjudicating authority has observed as under:- "3.4 From the submission and documents submitted by the said Not....