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2022 (8) TMI 539 - AT - Service TaxNature of activity - service or manufacture - work of segregation of cylinders, sealing of filled cylinders, de-shaping of cylinders by hydraulic pressure, spray of pesticides, disposing of collected muck/sludge, dirt, and bottling of LPG into cylinders to be sold by IOCL for the purpose of domestic use - Packaging Service - Works Contract Services - penalty - HELD THAT:- On perusal of the definitions of packaging service as existed up to 30/06/2012 and the negative list entry post 30/06/2012, both the entries provide an exemption from service tax if the process amounts to manufacture. The revenue has not disputed the fact that excise duty is being paid by IOCL on clearances of gas cylinders and that the expenditure is also a part of the valuation adopted for such purposes. Since these facts are not being disputed by the Revenue, therefore it is held that the activities undertaken by the Appellant would squarely be covered under the definition of manufacture under Section 2(f) of the Central Excise Act, 1944 and thus the said demand under packaging service cannot sustain. Works Contract Services - HELD THAT:- The Appellant has not disputed the demand on merits but only on limitation. The demand was raised based on audit of IOCL records. It is found that service tax is a self assessment regime and one cannot take the plea of being not paid/received service tax by the recipient. However under the peculiar circumstances of the case, it would be in the interest of justice to waive penalty by invoking the provisions under Section 80 of the Finance Act, 1994. Appeal allowed in part.
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