TaxTMI 
TaxTMI 
2026 (7) TMI 450
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....brief facts of the case are that the appellants are engaged in manufacture of metallic springs and they are manufacturing the same on their own as well as on job work basis in terms of Rule 4(5) of Cenvat Credit Rules (CCR), 2004. The department, based on verification of books of accounts, etc., felt that the activity of production of goods on behalf of the client falls within the purview of taxable service under the category of 'Business Auxiliary Service' (BAS) except in a situation where production of goods results into manufacturing activity within the meaning of section 2(f) of Central Excise Act, 1944, where production of such goods on behalf of others will not attract service tax. It was also noted by the department that production o....
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....here is a thin line between the words production and manufacture, in the instant case, the process undertaken by the assessees swings in favour of the word production. Therefore, I am unable to accept the contention of the assessees that they are manufacturing both dutiable goods. I hold that they are manufacturing dutiable goods and selling the same in the market and also undertaking job work of semi-finished goods, the process of which does not amount to manufacture, and thus rendering exempted service with nomenclature 'Business Auxiliary Service'." 4. Learned Advocate for the appellant has mainly contested that they are engaged in manufacturing goods on job work basis, which has not been disputed by either side and is also supported ....
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....e only to goods. Further, even assuming that the activity undertaken by the appellant was exempted in terms of Notification No. 08/2005-ST, reversal of credit was not warranted as the said notification was conditional notification. He has relied on certain judgments including Escorts Vs CCE [2004 (171) ELT 145 (SC)]. Learned Advocate has also submitted that even if they are liable to reverse certain amount in terms of Rule 6, they cannot be asked to pay an amount of 10%/8%/6% as the credit attributable to the exempted turnover was only 13.31 lacs. He has also contested the invocation of extended period on various grounds and has relied on various judgments. 6. Learned AR, on the other hand, apart from reiterating the findings of the adju....
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.... Heard both sides and perused the records. 9. The core issue to be decided in this appeal is whether the appellants were engaged in the activity that also amounted to manufacture of goods or otherwise. Before we proceed, we take note of the admitted facts. Firstly, in this case, there is no evidence that Notification No. 214/86 procedure was being followed, which exempted payment of Central Excise duty on excisable goods when cleared from the job worker's premises to the principal manufacturer's premises. Secondly, the appellants were clearly engaged in job work for the principal manufacturer on the raw materials supplied by them. Thirdly, they had not maintained any separate account for input services being used for dutiable springs man....
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....nature of processes to be undertaken on the raw material supplied would essentially emerge in a new product as distinct from the raw material or components supplied by the principal manufacturer having its own distinct name i.e., semi-finished springs, purpose and use. Moreover, even if it is not to be treated as fully manufactured good, the process, which is incidental or ancillary to the completion of manufactured product i.e., automotive springs, made by the principal manufacturer, in itself, is deemed to be manufacture in terms of inclusion clause under section 2(f) of Central Excise Act. Therefore, in the given factual matrix and other evidence on record, we find that the appellants were engaged in manufacture of excisable goods. The n....