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2023 (1) TMI 507 - AT - Service TaxNature of activity - Management or Business Consultant Service or not - appellant received Management Fees and other recoverable expenses on monthly basis from M/s Gillette India Ltd., Bhiwadi - demand alongwith interest and penalty - extended period of limitation - HELD THAT:- The amounts in question, were received undisputedly in terms of Annexure I to the purchase agreement between M/s Gillette India Ltd. and the appellant. The nature of the agreement makes it clear that it was an agreement for sale of goods by the appellant to M/s Gillette India Ltd. as per the specifications of the latter. To sell these goods the appellant manufactured them on which the appellant has been paying appropriate central excise duty - In any contract of job work, an agreement is entered into whereby an amount is paid to the job worker by the principal. If the job worker undertakes an activity which amounts manufacture, it has to pay appropriate central excise duty. In this case, the appellant has paid central excise duty. Thereafter, the appellant sold the goods to M/s Gillette India Ltd. in terms of the purchase agreement. Such sale or purchase is not a taxable service and no service tax can be charged on it. The entire case of the Revenue rests on the fact that in the books of account the appellant has recorded the amounts received on account of job work as per the agreement under the head “Management Fees”. Even if such entries are made by the appellant, it does not convert what is essentially an agreement for manufacture and sale of Razors and Blades into an agreement for rendering services. Thus, none of the elements required for levying service tax viz., a service provider, a service recipient, a taxable service and a consideration are present in the case. The impugned order is set aside and the appeal is allowed.
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