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2019 (10) TMI 534 - AT - Service TaxLevy of Service Tax - Work Contract Service or not - Appellants are undertaking fabrication, machining etc. of machinery parts / components on job work basis, out of raw material and with the infrastructure facilities provided in the factories of M/s Larsen & Toubro Ltd and M/s Essar Ltd. - Rule 4 (5)(a) of CCR, 2004 read with N/N. 214/86-CE. - Time Limitation - HELD THAT:- The appellant has produced the contract of the job work, labour invoices, challans for movement of goods and certificate issued by Principal manufacturers that they have discharged the excise duty on their final product. So far as the activity of fabrication of parts and components, accessories are concerned, the same is not in dispute. The aforesaid services are covered under ‘Business Auxiliary Service’ in terms of Section 65 (19) (v) of the Finance Act. The activity undertaken by the Appellant would not fall under the category of ‘Works Contract Service’ as neither there is transfer of any property in this case is involved in the execution of such contract, which is liable to tax as sale of goods nor it is for the purpose specified in sub-clause (a) to (e) of clause (ii) of Explanation to Section 65 (105) (zzzza). In the present case admittedly the Appellant has received the goods under job work challan issued under Notification No. 214/86-CE and Rule 4 (5) (a) of CCR,2004. The principal manufacturer has paid duty on clearance of their final product. In such view of the facts, when the goods were received under cover of challans issued under N/N. 214/86 read with Rule 4 (5)(a) of CCR, 2004, the same is not liable for service tax as the activity undertaken by the Appellant is exempted in terms of N/N. 8/2005 – ST dated 1.3.2005. Time Limitation - HELD THAT:- The demands are even time barred as the SCN was issued on 25.01.2012 for the period April 2008 to November 2011. The issue involved is of interpretation of statutory provisions and cannot be considered as wilful suppression of facts with an intend to evade payment of service tax. Even otherwise, if any service tax was payable by the appellant, the same was available to the customers as cenvat credit and thus the whole issue becomes revenue neutral. Appeal allowed - decided in favor of appellant.
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