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2018 (6) TMI 804 - AT - Service TaxBusiness Auxiliary Services - manufacture - whether the activities undertaken by the appellant on behalf of the other party amounts to manufacture or not? - whether they get covered under the exclusion clause of Section 65 (29) being an activity to manufacture and thus entitled for exemption from payment of service tax under Business Auxiliary Service? Held that:- Clause (iv) of Section 65 (19) of the Finance Act, 1994 provides that service in relation to production or processing of the goods for or on behalf of a client is covered under the business auxiliary service. However, the definition of business auxiliary service specifically excludes any activity which amounts to manufacture within the meaning of Section 2 (f) of the Central Excise Act, 1944 from levy of service tax - The Chapter IV of Central Excise Tariff Act, where milk and milk products are classified has a specific mention under Chapter Note 6 of Chapter 4 that” “in relation to products of this chapter labeling or relabeling of containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture”. Since the activity of manufacture, is excluded from the scope of classification and levy of service tax under business auxiliary service, the activity undertaken by the appellant are not leviable to service tax under business auxiliary service. Appeal allowed - decided in favor of appellant.
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