TMI Blog2021 (9) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... f excise returns filed before the Tribunal. The job charges received by the appellant have formed part of the cost of manufacture, which have suffered excise duty. Accordingly, service tax cannot be levied on the fixed components of job charges. There is no nature of pure civil construction service in the facts and circumstances and the facts stated by the appellant and as taken by audit team are undisputed - erection of storage tank and/or pipeline for carrying the concentrate or beverage for processing from one machinery or the other are essential part of the manufacturing process and accordingly the input credit is rightly taken by the appellant. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 70524 of 2019 - FINAL ORDER NO.70229/2021 - Dated:- 28-9-2021 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Vineet Kumar Singh, Advocate for the appellant Shri Gyanendra Kumar Tripathi, Authorised Representative for the respondent ORDER That the appellant is a job Worker of Hindustan Coca Cola Beverages Pvt. Ltd (HCCBPL in short) and accordingly registered with the Central Excise Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal manufacturer whereas as per the ER-1 return, duty has been discharged by the appellant itself. For denial of CENVAT Credit availed on various input services, department alleged that such services do not qualify as input services as defined under CCR 2004 without analysing the nature of service received by the appellant. 5. The show cause notice was adjudicated on contest by the learned Commissioner and the proposed demands confirmed with penalty. The case of the appellant is that the total job charges (fixed Variable) received by the appellant from the Principal manufacturer has already suffered Excise duty, and this fact is evident from the monthly excise return ER-1, (copy is enclosed in appeal paper book), whereas the adjudicating authority in his order has wrongly mentioned that the Excise duty has been discharged by the Principal manufacturer HCCBPL, which is not based on actual fact. 6. The reason for segregation of total job charges into fixed variable is that in case of no or less demand in off season, the appellant would be in a position to meet out its Financial cost other fixed expenses incurred on maintenance of the Plant, but in any case as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant is liable to pay service tax on Job Charges received from HCCBPL, even then service tax so paid on job charges would be available as CENVAT Credit while making payment of duty on goods manufactured as a result of such Job work. In other words the entire exercise is Revenue Neutral. 9. The appellant further submits that the adjudicating authority had confirmed the demand on the ground, which was not alleged in the SCN, hence the adjudicating authority had gone beyond the SCN which is not permissible in the law. Hence the entire impugned O.I.O is liable to be set aside on this ground alone. 9.1. So far the disallowance of cenvat credit of ₹ 8,29,510/- on dismantling charges paid to vendors, the appellant submits that the plant and machinery which were owned by HCCBPL were dismantled from the Varanasi plant of the principal and the same were relocated in the manufacturing unit of the appellant. Such machinery is being used by the appellant for manufacture of dutiable goods which is undisputed. There is no change of ownership of the machinery which continues to be HCCBPL. Such machinery have got a direct nexus with the manufacturer of excisable goods and hence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as erection of steel door by the Revenue. Such erection of pipeline with exhaust facility is integral part of plant and machinery for manufacture of dutiable goods, being beverages and mineral water. Accordingly, appellant prays for allowing the cenvat credit disputed by the Revenue. 10. Learned Authorised Representative for the Revenue contented that effective control possession of plant machinery is not with the Principal Manufacturer HCCBPL, hence fixed charges fulfils the condition of supply of tangible goods service as provided under the Finance Act 1994 and attracts service tax. Learned Commissioner have rightly held that negative list entry only cover the activity amounting to manufacture i.e. principal manufacturer had paid Central Excise duty on the said amount. But in the instant case, the appellant have received fixed charges on account of cost of assets deployed by the noticee. The fixed charges have been received on account of fixed expenses to be met for the reason that whenever there is no production of goods for lack of demand in the market as admitted by the appellant also. Learned Commissioner have rightly held that the fixed amount received on per ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal manufacturer and the Principal manufacturer decides the manufacturing schedule of the factory. c. Having transferred the right to use goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. 12. Having considered the rival contentions, we find that the appellant have actually entered into an agreement for manufacture on job work basis. Evidently, as per the agreement the job charges have been spread over in two tier billing i.e. fixed charges and variable charges. The reason being that in summer season there is more demand of packed water and beverages, whereas in other months, the demand is lower. Keeping in view the constant availability of funds to meet the fixed charges and finance charges and for variable cost towards job charges, two tier billing has been provided, to the appellant job worker to meet the financial obligation round the year. Admittedly, appellant has paid the excise duty on the goods manufactured and cleared for the principal manufacturer, as is evident from the copy of excise returns filed before the Tribunal. In this view of the matter, we conclude that the job charges received by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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