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2022 (3) TMI 1105 - AT - Service TaxLevy of service tax - Business Auxiliary Service (BAS) or Works Contract Service (WCS) - activity of providing powder coating and anodising of aluminium goods supplied by their client on job work basis - HELD THAT:- The appellant has admittedly carried out the job work of powder coating and anodizing on the aluminium goods supplied by their client. The appellant is doing the job work against the job work charges mutually decided by the appellant and the client. The activity of powder coating and anodizing is clearly an activity of production or processing on behalf of the client since the same is carried out on the basis of job work. This Tribunal has considered the issue in similar facts in various judgments and came to conclusion that the similar activity is classifiable as ‘production or processing of goods on behalf of the client’ under the main head of service viz. BAS and accordingly the same is liable to service tax. From the judgment in M/S MR & SONS VERSUS C.C. - AHMEDABAD [2018 (8) TMI 32 - CESTAT AHMEDABAD], it can be seen that out of various activities, one activity was of painting on job work basis, which is akin to powder coating and anodizing - Following the said judgment, in the present case also being the similar activity, the process of Powder Coating and Anodizing being production on behalf of client clearly falls under BAS and hence the same is liable for service tax. The appellant’s main plea is the activity of job work since with material such as chemicals will fall under the “Works Contract Service” on the ground that on the said activity the appellant has discharged the VAT - the activity of the job work in the present case does not fall under Explanation clause (ii). As regard the clause (i), the necessary limb of the definition is the property in the goods must be transferred. In this case, claim of the appellant is that the property in the chemicals used for the job work stand transferred to the service recipient. Undisputedly the chemicals used for Powder Coating and anodizing is part of the service as the same gets consumed during the job work and lost its existence. Moreover the main aluminium goods is supplied by the client and it’s property remains with the client before and after the job work. The cost of chemicals gets subsumed in the job work charges. For this reason also, it cannot be said that there is any transfer of property in goods from the hands of the appellant to his client. Appeal dismissed.
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