SERVICE TAX Appeal No. 13843 of 2013-DB
[Arising out of Order-in-Original/Appeal No SUR-ECCUS-02-APP-182-13-14 dated 30.08.2013 passed by Commissioner of Central Excise, Customs and Service Tax-SURAT-II]
Gujarat Insecticides Limited
VERSUS
Commissioner of Central Excise & ST, Surat-ii
APPEARANCE :
Shri Dhaval K. Shah, Advocate for the Appellant.
Shri Anand Kumar, Superintendent (AR) for the Respondent
CORAM: HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON’BLE MR. C.L. MAHAR, MEMBER (TECHNICAL)
DATE OF HEARING: 14.03.2023 DATE OF DECISON: 24.03.2023
FINAL ORDER NO. A/10706 / 2023 RAMESH NAIR :
The issue involved in the present case is that, whether under the arrangement of job work by the appellant for M/s. Gharda Chemicals Limited in their factory, the activities would amount to services of Management, Maintenance or Repair or otherwise.
- Shri Dhaval K. Shah learned Counsel appearing on behalf of the appellant, at the outset submits that the identical show cause notice was issued to the appellant for the different period and in this case the show cause notice is for a subsequent period.In the earlier case, this Tribunal has allowed the appeal of the appellant vide Final Order No. A/10212/2023 dated 06.02.2023, therefore the issue is no longer res-integra.
- Shri Anand Kumar, learned Superintendent (AR) appearing on behalfof the Revenue reiterates the findings of the impugned order.
- On careful consideration of the submissions made by both the sides and perusal of the record, we find that there is only difference of period in the present case and the case which was decided by this Tribunal vide order dated 06.02.2023.Therefore, except for the period, all the facts are same and therefore as per the judicial discipline we have to follow this Tribunal’s order No. A/10212/2023 dated 06.02.2023 wherein this Tribunal has passed the following order:-
“4. We have carefully considered the submission made by both sides and perused the records. We find that the demand was confirmed under the head of Management, Maintenance & Repair Service as per section 65(105) (zzg) of the Finance Act, 1994. The Management, Maintenance & Repair service is defined under section 65 (64) of the Finance Act, 1994 which is reproduced below:-
“(64) “Management, maintenance or repair” means any service provided by —
- Anyperson under a contract or an agreement; or
- Amanufacturer or any person authorised by him, in relation to,
- Managementof properties, whether immovable or not;
- Maintenanceor repair of properties, whether immovable or not; or
- Maintenance or repair including reconditioning or restoration, or servicing of any goods, excluding a motor vehicle
Explanation.—For the removal of doubts, it is hereby declared that for the purposes of this clause-
- “goods”includes computer software;
- “properties”includes information technology software”
From the plain reading of the above definition of Management, Maintenance & Repair Service the main condition is that the Management, Maintenance & Repair Service of the plant should belong to the service recipient and not to the service provider. In the present case the order impugned has held the appellant as service provider and Gharda Chemicals Ltd as service recipient. It is also not disputed that it is the service recipient M/s GCL is paying for the use of manufacturing facilities of the appellant for manufacture of the excisable goods of M/s Gharda chemicals. In this fact the appellant using their own plant machinery equipment that too for production of excisable goods on behalf of M/s Gharda chemical Ltd. In this undisputed fact by any stretch the
activities of the appellant cannot be classified under Management, Maintenance & Repair Service. Moreover, the activity per se cannot be treated as service itself for the reason that the activities carried out by the appellant is purely of manufacture of excisable goods with the inputs and packaging material supplied by the GCL and the said manufacturing was done on job work basis on behalf of M/s GCL.
- The principle manufacturer M/s GCL has supplied the input and packingmaterial to the appellant under Rule 4(5)(a) of Cenvat Credit Rules, 2004. It is further established that the activities carried out by the appellant is of manufacture of excisable goods on job work basis. The principle manufacturer M/s. GCL is under legal obligation to discharge the excise duty on the job work goods received by them from the appellant. The show cause notice has not alleged that the principle manufacture has not cleared their final product without payment of excise Accordingly the activities at the most can be classified under sub clause of production or processing on behalf of the client under business auxiliary service.
- Firstly, when the principle manufacturer and appellant as job worker complied with the conditions prescribed under Notification No. 08/2005- ST even if it is treated as business auxiliary service the same is exempted under the said notification, Secondly, when thedemand was raised under Management, Maintenance & Repair Service and as per our opinion it is not the correct classification the demand is not sustainable on this ground itself. The adjudicating authority put heavy emphasis on the fact that the entire plant was used exclusively for production of goods of GCL. Therefore, the service is classified under Management, Maintenance & Repair Service. As we already observed above that since the plant machinery equipment used for the purpose of production belongs to the appellant, the service is not classified under Management, Maintenance & Repair Service. Further, the activities carried out by the appellant are undoubtedly production of goods on job work basis on behalf of GCL. This position will not alter irrespective of fact that whether the plant, machinery &equipment are used exclusively for GCL or partly for GCL or partly for others, therefore, on this basis the activity cannot be classified as Management, Maintenance & Repair Service.
- We further find that the activity of the appellant is indeed manufacture of excisable goods in terms of section 2(f) of CEA, 1944. As per the definition of business auxiliary service manufacture of excisable goods in terms of section 2(f) of the Central Excise Act, 1944 is clearly excluded from the definition of business auxiliary service. For this reason also, the demand of service tax is not sustainable.
- As per our above discussion and finding the impugned order as a whole is not sustainable, hence we set aside the impugned order. The appeal is allowed with consequential relief.”
- In view of the above decision in the appellant’s own case, the issueis no longer res-integra. Accordingly, following the above decision, in the present case the impugned order is set-aside the appeal is allowed.
(Pronounced in the open court on 24.03.2023)
(Ramesh Nair) Member (Judicial)
(C L Mahar) Member (Technical)
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