TMI Blog2014 (1) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... ce provider provides the such service to the 3rd person, on behalf of the client i.e. acting as an agent of the client. Admittedly, in the instant case, there is no 3rd person. Thus, the activity as undertaken does not fall under business auxiliary service or any other existing taxable services - ‘production of goods on behalf of the client’ covers situations where the service provider undertakes job work for the client. In view of the amendment, production or processing (not amounting to manufacture) done either for the client or on behalf of the client would be liable to service tax - Therefore, appellant’s activity prior to June 2005 cannot be held to be exigible to service tax under the category of BAS. Accordingly, we set aside the impugned order and allow the appeal with consequential relief to the appellant - Decided in favour of assessee. - Appeal No. 275 of 2007 - Final Order No. 50032/ 2014 - Dated:- 1-1-2014 - Ms. Archana Wadhwa and Shri Rakesh Kumar, JJ. For the Appellant : Shri B. L. Narasimhan, Advocate For the Respondent : Ms. Ranjana Jha, Jt. CDR JUDGEMENT Per: Archana Wadhwa After hearing both the sides we find that the demand of duty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rming the demand and imposing penalties. 4. During the relevant period the definition of BAS was as under: (19) business auxiliary service means any service in relation to- (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production of goods on behalf of the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clause (i) to (vi) such as billing, issue of collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology service and any activity that amounts to manufacture within the meaning of clause (f) of section 2 of the Central Excise Act, 1944 . 5. As such, as seen from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Inasmuch as the appellant, in the present case, is working directly for the steel plant and not on their behalf for any third party, the said second criteria of the definition does not stand satisfied. For the above proposition he relies upon the decisions of the Tribunal in the case of Auto Coats vs. CCE (ST), Coimbatore - 2009 (15) STR 398 (Tri. Chennai), Sonic Watches Ltd. vs. CCE, Vadodara -2011 (21) STR 34 (Tri. Ahmd.) and Rathore Engg. Works vs. CCE, Chandigarh- 2012 (27) STR 37 (Tri.- Del.). He also draws our attention to the Board Circular dated 15.07.2007 and another Circular dated 27.07.2005 clarifying that inasmuch as the expression processing and for were introduced in the definition w.e.f. June 2005, the service provider working as a job worker for his client cannot be held to be working on behalf of the client prior to the amendment. Apart from contesting the demand on merits he also submits that the same is barred by limitation having been raised beyond the normal period. He submits that the Commissioner was aware of the activities being undertaken by the appellant inasmuch as prior to the present show cause notice, regular show cause notices were being issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther. As regards the decisions of the Tribunal, she submits that during the relevant period though the expression for the client was not there but the expression on behalf of the client would cover both the situations and as such her arguments on the said point should be taken into consideration. 8. Having appreciated the submissions made by both the sides, we first of all note that there is no dispute on the detailed activity undertaken by the appellant vide which they separate the iron metal from the molten slag. As such we do not feel the need of referring the same, as the dispute does not revolves around the said activity, but relates to as to whether the said activity can be called as production of goods and further on behalf of the client . As regards the expression production of goods , we note that the same was amended in June 2005 and was substituted by the expression processing of goods. As such it is clear that prior to the amendment and in the absence of the words processing the same has to be interpreted in a manner that the activity results in production of goods. We may here observe that every production may not amount to manufacture bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Law would, however, continue. 24.2 A point was raised whether production of goods on behalf of the client covers situations where the service provider undertakes job work for the client. In view of the amendment, production or processing (not amounting to manufacture) done either for the client or on behalf of the client would be liable to service tax. 10. Apart from the above circulars of the Board there are decisions of the Tribunal settling the issue at rest. In the case of Auto Coats - 2009 (15) STR 398 (Tri. Chen.) it stands held that prior to 16.06.2005 unless a person was engaged by another for processing the goods entrusted by a third person, such activity would not be exigible to service tax. Similarly in the case of Sonic Watches Ltd.- 2011 (21) STR 34 (Tri.) it was held as under: 5. We find that activity undertaken by the appellants in this case was similar to the one as existed in the case of Auto Coats. Therefore, in the light of above two decisions discussed above, it cannot be said that appellants have undertaken job work on behalf of the clients, in view of the fact that there were only two parties to the transaction in this case, whereas where th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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