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2019 (7) TMI 955 - AT - Service TaxClassification of services - Business Auxiliary services or not - manufacture and sale of alcoholic beverages to the customers/indenters of UBL as per the instruction of UBL - demand alongwith interest and penalty - Date of amalgamation/ merger of the Appellant’s unit with M/s United Breweries Ltd. - Time Limitation - HELD THAT:- After the amendment to the definition of Business Auxiliary Service with effect from 1/9/2009, the activity of manufacture of non-excisable goods, that is alcoholic beverages, would fall within the scope of Business Auxiliary Service - the activity of manufacture of alcoholic beverages, being not an excisable goods, accordingly, does not fall within the exclusion clause of the amended definition of Business Auxiliary Services. The CBEC Circular No. 249/1/2006-CX-4 dt. 27.10.2008 issued clarifying the applicability of un-amended definition of Business Auxiliary Service, hence is not relevant to the facts of the present case. - Decided in favor of revenue. Determination of value - Production or processing of goods for, or on behalf of, the client - Held that:- The arrangement/agreement for manufacture and sale of branded alcoholic beverages between the appellant and M/s UBL is a complex one; even though the appellant is authorised to sale the manufactured branded beer in the local market, but the customers/indenters are as per the instruction of M/s UBL; the sale price is fixed by M/s UBL after mutual consultation. Thus it is not a simple provision of service agreement, where under, the service is flown from appellant to M/s UBL and the consideration is received against the service rendered. It is the argument advanced on behalf of the revenue that the service charges are adjusted against the sale price, and the balance amount returned to the service receiver out of the sale proceeds of manufactured branded beer for and on behalf M/s UBL. The value of the services needs to be determined keeping in mind the N/N. 39/2009 ST dt. 23.9.2009 and the principles of valuation prescribed under Section 67 of the Finance Act and the Valuation Rules, 2006. The Adjudicating authority has erred in adopting the sale price of the Appellant. - Decided in favor of assessee. Cessation of service tax liability - Date of amalgamation/ merger between the service provider and principal - Appointed ate is 1.4.2010 - Appellant had not brought to the notice of the Department about the fact of amalgamation scheme presented to BIFR. The Registration Certificate was amended only on 05.12.2012. - HELD THAT:- The ‘appointed date’ i.e. as on 01.4.2010 be taken as the date of amalgamation/merger of the Appellant Unit with M/s UBL as sanctioned by the BIFR. - Decided in favor of assessee. Time Limitation - HELD THAT:- The arrangement between the Appellant and M/s UBL for manufacture of branded beer on behalf of M/s UBL has been disclosed and within the knowledge of the Department. In these circumstances, the allegation of suppression cannot be sustained against the Appellant. Therefore, the demand is barred by limitation. Appeal allowed - decided in favor of assessee.
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