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2015 (6) TMI 659 - AT - Service TaxBusiness Auxiliary service - Job work - Manufacture - process of converting 'Para Nitro Cumene, in to 'Para Cumidine' - Held that:- Both the lower authorities have wrongly concluded that the processing activity undertaken by the appellant does not amount to 'manufacture' for more than one reason. Firstly, it is undisputed that the goods or inputs were received by the appellant from the principal manufacturer under job work-challan as per the provisions of Rule 4(5)(a) of the CENVAT Credit Rules. The said sub-rule mandates for movement of duty paid inputs on which CENVAT credit is availed, for further processing in to intermediate product outside the factory premises and receiving them back for further consumption. We find from records that the principal manufacturer had clearly intimated the Department as to the intention of getting the part of the process done from the appellant. This activity of processing in the appellant's factory premises is definitely an activity of 'manufacture' inasmuch as, the finished goods coming into existence after processing are different from the inputs which are put into use. When there is a chemical reaction involved, the finished goods coming after the chemical reaction cannot be said to have been not manufactured. We perused the chemical formula and the properties of the inputs and of the final goods and we find that there is a difference between the two which would mean that the finished goods 'Para Cumidine' is arising out of a manufacturing process. In our considered view, the activity undertaken by the appellant would amount to manufacture even if it is under a job-work procedure. - impugned order is unsustainable and liable to be set aside - Decided in favour of assessee.
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