Respected Forum,
I am doing Powder Coating on Motor Vehicle Parts. Using powder purchased by me. Not charging any service tax or excise duty. Principal manufacturer is paying excise duty on the product being Powder Coated by me.
Please guide me in the light of Notification No. 25/2012 dated 20-06-2012, what is my liability.
Does Powder Coating activity is "AMOUNT TO MANUFACTURE" as per Central Excise? if yes, should i apply for registration certificate as my previous year aggregate sale of specific service is more than 3.00 crore.
Prior to 01-07-2012 i was availing benefit of input services and inputs and charging Service Tax on the services provided by me as i am registered with Service Tax under B.A.S.
If powder coating is amount to manufacture either before or after 01-07-2012, what should i do and what immediate step i should take to save myliability of central excise
thanks and regards
Powder Coating amounts to manufacture. You need to pay the Excise Duty on such manufacturing activity.
| TMI ID= 243497 |
| 2014 (2) TMI 99 - CESTAT MUMBAI (2014 (2) TMI 99 - CESTAT MUMBAI) |
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ENDURANCE SYSTEMS INDIA PVT LTD Versus COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS
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Business Auxiliary Service - Job Work - Activity of powder coating and chrome plating for various motor vehicle parts received from the manufacture on job works basis - Held that:- Appellants are undertaking the activity of powder coating and chrome plating for various motor vehicle parts and was working notification No.214/86-CE. The appellants are receiving the motor vehicle parts from principle manufacturer and after undertaking the activity of powder coating cleared to the principal manufacturer and the same goods are used in the manufacture of excisable goods cleared on payment of duty. As the processes undertaken by the appellant amounts to manufacture as per the decision relied upon by the appellant as the same is part of manufacturing process. Therefore, we find that appellants are not liable to pay service tax under the category of Business Auxiliary Service - Decided in favour of assessee.
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| No. - ST/212/08-Mum. |
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| Dated - October 24, 2013 |
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S S Kang And P K Jain, JJ.
For the Appellant : Shri T C Nair, Adv.
For the Respondent : Ms. D.M.Durando, Dy. Commissioner (A.R)
PER : S S Kang
Heard both sides.
2. Appellant filed this appeal against the impugned order passed by Commissioner (Appeals).
3. The appellants are undertaking the activity of power coating and chrome plating for various motor vehicle parts received from the manufacture on job works basis. The Revenue issued show cause notice for demand of service tax under the category of Business Auxiliary Service. The adjudicating authority confirmed the demand and imposed penalties. The appellant filed appeal before Commissioner (Appeals) and the same was dismissed.
4. The contention of appellant is that appellants were working under the notification No.214/86-CE. The appellants were receiving motor vehicle parts for power coating and the same were cleared to the principal manufacturer and the same are used in the manufacture of motor vehicle parts of which are cleared on payment of appropriate excise duty. The appellant also relied upon the decision of the Tribunal in the case of Bajaj Auto Ltd. Vs. Collector of Central Excise, Pune reported in 1996 (80) ELT 644 (Tribunal) to submit that electroplating amounts to manufacture. In the case of Modison Metal Refiners Vs. Collector of Central Excise, Bombay reported in 1996 (88) ELT 292 the Tribunal also held that electroplating on job work basis which result in increased resistance and better electrical properties is a process incidental or ancillary to the completion of manufacture within the meaning of Section 2(f) of the Central Excise Act. In view of this, the contention is that as the processes undertaken by the appellants are in respect of manufacture of goods which are cleared on payment of duty. Therefore the demand under the Business Auxiliary Service is not sustainable.
5. Revenue relied upon the findings of lower authority and submit that the activity undertaken by the appellant does not amount to manufacture as the appellants were clearing the goods under Notification No.214/86 at nil rate of duty is also submitted. Hence, the demand is rightly made.
6. We find that the appellants are undertaking the activity of powder coating and chrome plating for various motor vehicle parts and was working notification No.214/86-CE. The appellants are receiving the motor vehicle parts from principle manufacturer and after under taking the activity of powder coating cleared to the principal manufacturer and the same goods are used in the manufacture of excisable goods cleared on payment of duty. As the processes undertaken by the appellant amounts to manufacture as per the decision relied upon by the appellant as the same is part of manufacturing process. Therefore, we find that appellants are not liable to pay service tax under the category of Business Auxiliary Service. In view of this, the impugned order is set aside and appeal is allowed. The appellants are entitled for consequential relief if any in accordance with law.
(Dictated in Court)
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Dear Mr. Khatri,
This is the order of 24-10-2013, please allow me to interpret , i may be at mistaken "IT MEANS, PRIOR TO THIS DATE THE DEPARTMENT WAS ESTABLISHING ACTIVITIES OF POWDER COATING AND CHROME PLATING WAS NOT AMOUNT TO MANUFACTURE.
Please also clarify me that i have done Powder Coating 01-10-2010 to 02-01-2014, I provided both taxable and exempted service. In the light of this decision , what will be the status of my services and in future what should i do, if i want to continue providing Powder Coating Services.
Should i apply for excise registration?, what correct action should i do?
Can department apply this decision from retrospectively or only this decision can apply prospectively.
Please guide me accordingly.
With kind regards
Dear Sir,
This judgment would also cover the period which you are mentioning in your query. You must opt for central excise registration as in this judgment two prior period judgments have also been quoted.
If required, you can also approach to the Commissioner and seek his opinion. Pay the due C.E. Duty with interest to avoid any unwarranted attention of the Department.
Regards,
Team YAGAY & SUN
(Indirect Tax Consultants)
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