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2014 (1) TMI 1049 - AT - Service TaxBusiness Auxiliary Service - Whether the activity of appellant can be called as ‘production of goods’ and further ‘on behalf of the client’ - Period of Demand - Bar of limitation - Penalties under Sections 76 and 78 - Demand of service tax - Held that:- detailed activity undertaken by the appellant is that in which they separate the iron metal from the molten slag - As regards the expression ‘production of goods’, we note that the same was amended in June 2005 and was substituted by the expression – incineration/ shredding of bio-medical where can, by no stretch of imagination, be called as ‘processing of goods’, even if in certain cases the shredded materials may be used as filters etc. Further, the activity also does not qualify to be called as provision of service on behalf of the client. This is because the taxable activity envisaged under this category of ‘business auxiliary service’ is that while the ‘client’ is obliged to provide some service to a 3rd person but instead of the client providing such service, the service provider provides the such service to the 3rd person, on behalf of the client i.e. acting as an agent of the client. Admittedly, in the instant case, there is no 3rd person. Thus, the activity as undertaken does not fall under business auxiliary service or any other existing taxable services - ‘production of goods on behalf of the client’ covers situations where the service provider undertakes job work for the client. In view of the amendment, production or processing (not amounting to manufacture) done either for the client or on behalf of the client would be liable to service tax - Therefore, appellant’s activity prior to June 2005 cannot be held to be exigible to service tax under the category of BAS. Accordingly, we set aside the impugned order and allow the appeal with consequential relief to the appellant - Decided in favour of assessee.
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