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TMI Blog2013 (9) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Zuari Industries Ltd., Goa, for which they received consideration. The department was of the view that the activity undertaken by the appellant would come within the purview of packaging services as defined in Section 65 (76b) of the Finance Act, 1994 and therefore, M/s.NEHA are liable to pay service tax and accordingly a show-cause notice was issued to the appellant demanding service tax of Rs.3,20,47,239/- for the period 16/06/2005 to 31/03/2010 vide notice dated 20/10/2010. The notice was adjudicated vide the impugned order and the demand was confirmed along with interest thereon and equivalent amount of penalty was also imposed apart from a penalty of Rs.5,000/-. Hence, the appellant is before us. 3. The Ld. Counsel for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of the Tribunal in the case of Afco Industrial & Chemicals Ltd., Vs. Collector of Central Excise and Customs, Pune, reported in 1987 (32) ELT 220 (Tribunal) wherein in respect of chemicals Barium Chloride and Barium Chloride Anhydrous, it was held that packaging is essential for completion of the manufacturing activities. Similarly, in the case of Flex Engineering Ltd., Vs. CCE, UP, reported in 2012 (276) ELT 153 (SC), the hon'ble apex Court held that if the product is not saleable, it will not be marketable and consequently process of manufacture is incomplete and excise duty would not be leviable on it. Applying the ratio of the above decisions to the facts of the present case, it can be seen that without packaging, ferti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured product. Thus the completion of fertilizer as a manufactured product would be over only when the packaging is completed. Without packaging, fertilizer cannot be marketed. Therefore, there is merit in the contention of the appellant that the activity of packaging undertaken in respect of fertilizer would form an integral part of the manufacturing activity and cannot be viewed as a service activity, especially in the context of the packaging activity as defined in Section 65 (76b) which excludes form its scope any activity of manufacture as defined in Section 2 (f) of the Central Excise Act, 1944. Thus, the appellant has made out a strong case in their favour against pre-deposit of the dues adjudged. 6. Accordingly, we grant uncondi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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