TMI Blog2014 (5) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice has been issued on the basis that the appellant’s activity is auxiliary or incidental to production of goods and hence is covered by the definition of Business Auxiliary Service taxable w.e.f. 16-5-2005 and would be liable to service tax. On perusal of the impugned order-in-original, it is seen that the appellant’s activity has been looked at in isolation ignoring the fact that it is part of manufacture of vegetable oil by solvent extraction process by M/s. Kirti Industries Limited. When M/s. Kirti Industries Limited manufacture oil by solvent process and only the job of cleaning up the tin containers, packing of oil and their sealing and labelling has been given to the appellant and this job has been performed by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant who perform the packing operations in the factory premises of the appellant. The activity of the appellant involves cleaning and testing of empty tin containers, affixing of lebels on the containers and thereafter filling up and sealing of the same. According to the department, this activity of the appellant would attract service tax as Business Auxiliary Service as defined under Section 65(19) of the Finance Act, 1994 read with Section 65(105)(zzb) ibid. It is on this basis that the department issued a show cause notice dated 27-4-2007 to the appellant for demand of service tax along with interest on the amount being received by them from M/s. Kirti Industries Limited and for imposition of penalty on them under the provisions of Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 510, 151 1, 1512, 1513, 1514, 1515 1518 and sub-heading 1516.20, 1517.19, 1517.1010, 1517.1021 or 1517.1029 labelling or relabelling of containers and repacking from bulk to retail packs or the adoption of any treatment to render the product marketable to the consumer shall amount to manufacture, that the oil being manufactured by M/s. Kirti Industries Limited falls under Heading 1507 and, therefore, the activity of its packing from bulk to retail pack, and their labelling would amount to manufacture in terms of above mentioned Chapter Note 5 of Chapter XV, that since this activity amounts to manufacture, the same would not be covered by the definition of Business Auxiliary Service as defined under Section 65(105)(zzb) of the Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant and this job has been performed by the appellant in the factory of M/s. Kirti Industries Limited and when in terms of Chapter Note 5 of Chapter XV, the packing from bulk to retail pack, labelling and relabelling of the goods of heading 1507 would amount to manufacture, the process undertaken by the appellant would amount to manufacture and if the process is manufacture, the same would not be service. However, we find that this aspect has not been examined either in the order-in-original or in the impugned order-in-appeal. In fact, in the impugned order-in-appeal, the Commissioner (Appeals) has observed that the services being provided by the appellant are procurement of goods or services, while the show cause notice mention th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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