2023 (9) TMI 657 - CESTAT AHMEDABAD

Business Auxiliary Service - Activity amounting to manufacture or not - welding, fabrication, cutting, binding and other related activities on job work basis in respect of manufacture of ship - activity is provision of service under the category of Business Auxiliary Service - HELD THAT:- As per the facts of the case, the respondent have undertaken the job of various activities such as welding, fabrication, cutting, binding and other related activities for the purpose of manufacture of ship on behalf of M/s L&T. The learned Commissioner (Appeals) after detailed analysis came to the conclusion that the appellant’s activity is amount to manufacture of excisable goods, therefore, the same is excluded from the definition of Business Auxiliary Service, hence not liable to service tax.

After close analysis of section 2 (f) and definition of Business Auxiliary Service, and also relying on the various judgments, the learned Commissioner (Appeals) has come to the conclusion that the activity of the appellant is indeed an activity amounts to manufacture in terms of Section 2(f) which is excluded from the definition of Business Auxiliary Service as well as in the Notification No. 8/2005-ST. Therefore, the finding of the learned Commissioner (Appeals) is convincing and there are no infirmity therein.

It appears that the contention of the Revenue is that even though the same activity though amounts to manufacture but since M/s L&T is the manufacturer, the appellant is a service provider for the same activity - as per the exclusion provided in the definition of Business Auxiliary Service, the activity is not a person specific but the activity specific, therefore, if the activities of welding, fabrication, cutting, binding and other related activities amount to manufacture even if M/s L&T is a manufacturer but the activities per se is manufacturing activity irrespective of the ownership of the goods or M/s L&T being a manufacturer, the respondent who carried out such activity which is otherwise a manufacturing activity in terms of Section 2(f) merely because M/s L&T is a manufacturer will not fall under the definition of BAS because the Business Auxiliary Service excludes only the activity of manufacturing not related to manufacturer, therefore, the Revenue’s ground on this aspect also not affected the concluding finding of the learned Commissioner (Appeals) in the impugned order.

The impugned order is legal and proper which does not require any interference - Appeal of Revenue dismissed.