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2018 (10) TMI 34 - AT - Service TaxBusiness Auxiliary Service - it appeared to the department that appellants are involved in the activity of ‘production of goods on behalf of the clients’ on which service tax is required to be paid - N/N. 8/2005-ST dt. 1.3.2005 - Held that:- It is evident that till verification done on 11.09.2006 by the department, the appellants were not discharging any duty or tax liability on the activities carried out by them. It is not disputed that they were doing job work such as machining, drilling, milling etc. on the goods received under cenvat challans from Magna Electro Castings Ltd. It is also evident that only after the verification action by the department started, the appellant had filed the first return on 24.10.2006 claiming exemption under Notification No.8/2005-ST dt.01.03.2005. Mere allegation against Magna Electro Castings Ltd., that too in passing, in para 10.5 of the SCN dt.15.05.2008 and in para-2 of the SCN dt. 16.10.2008 cannot be taken as a bulwark for initiating proceedings against their job workers, the appellants herein. The activities carried out by the appellant will indeed amount to ‘manufacture’ for the purpose of Section 2(f) of the Central Excise Act,1994 and in consequence, the same will not be a Business Auxiliary Service under Section 65 (19) of the Finance Act, 1994 and therefore no service tax liability will arise in consequence - Appeal allowed - decided in favor of appellant.
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