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2023 (6) TMI 788 - CESTAT AHMEDABADExemption from Service Tax to taxable service of production of goods on and for behalf of a client - Business Auxiliary Service (production of processing goods on behalf of client) - process of sterilizing goods of client on job-work basis and for which the job charges are collected - denial of exemption on the ground of client has not supplied raw material and after the process of sterilization the goods were not used further in the manufacture of final product by their client - N/N. 8/2005. HELD THAT:- There is no dispute that appellant have carried out the activity of processing of goods on behalf of the clients which is covered under taxable entry of Business Auxiliary Service - From the plain reading of the notification it is clear that not only the raw material should be processed by the job-worker but even some finished goods are also to be processed for the eligibility of exemption notification - In the present case, the packed goods were supplied to the appellant for carrying out process of sterilization therefore the packed goods before sterilization are semi-finished goods. Therefore the contention of the Revenue that only raw material should be processed to be eligible for exemption is incorrect as semi-finished goods are also allowed to be processed for making eligible for the above notification. The term “production of goods” has been explained under explanation-(i) of the aforesaid notification and according to which the job-worker is at liberty to process partly or fully to complete the product. Therefore, it is the provision that once the process is done which is required to complete the product, no further manufacturing is required. Therefore, the contention of the department that job worked good should be necessarily be used by the principal client for further manufacturing is contrary to the explanation-(i) of the notification. Therefore, on this count also the benefit of notification cannot be denied to the appellant. A plain reading of Board clarification issued vide No. B1/6/2015-TRU letter dated 27.07.2005, it can be seen that said clarification only deals with the issue of taxability of Business Auxiliary Service in particular production or processing of goods on behalf of client - there is no dispute about the taxability of service under the sub-heading of production or processing of goods on behalf of client, under taxable entry of Business Auxiliary Service, but the issue involved in the present case is eligibility to Notification No. 8/2005-ST. The aforesaid clarification does not deal with the issue of such exemption notification therefore the above clarification is of no help to the Revenue in the present case. The demand is not sustainable hence the impugned order is set-aside and the appeal is allowed.
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