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Carlsberg India Private Limited, International Spirits And Wines Association of India (Iswai) & Others, Confederation of Indian Alcohol Beverages Companies Versus Union of India & Others

2016 (8) TMI 250 - DELHI HIGH COURT

Constitutional validity - levy of service tax on person manufacturing alcoholic liquor for human consumption on job work basis – Section 66B of the Finance Act, 1994 read with 65B(40) and section 66D - Notification No. 14/2015/-ST dated 19th May 2015 – Held that: - what is sought to be made amenable to service tax is the activity of contract manufacturing of alcoholic liquors fit for human consumption by one entity for another. Such provision of service which is in pith and substance not covered .....

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enue - W.P.(C) 1120/2015 & CM No.1991/2015, W.P.(C) 5498/2015 & CM Nos.9883/2015 & 10428/2015, W.P.(C) 5713/2015 & CM No.10271/2015 - Dated:- 5-8-2016 - S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr V. Lakshmikumaran with Mr M. P. Devnath, Mr Abhishek Anand, Mr Vivek Sharma, Mr Yogendra Aldak and Mr Karan Sachdev, Advocates For the Respondents : Mr Sanjay Jain, ASG with Mr R. D. Bhardwaj, CGSC, Mr Bhagwan Swaroop Shukla, CGSC, Mr Shreshth Jain, Mr Vidur Mohan, Mr Aakash Nagar and .....

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Act, 2015 ( FA 2015 ) respectively, along with Notification No. 14/2015/-ST dated 19th May 2015, which levies service tax with effect from 1st June 2015, on persons who manufacture alcoholic liquor for human consumption on job work basis. Also challenged is the constitutional validity of Section 113(A) (1) of the Finance Act, 2009 ( FA, 2009 ) by which Section 65(19) of the FA 1994 stood amended. 2. The central thrust of the Petitioners' argument is that Parliament lacks the legislative com .....

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be traced to the residual Entry 97 of List I of the VII Schedule to the Constitution. The Respondents contend that service tax is not levied on the manufacture of alcohol but on the service aspect of the contract of manufacturing of alcohol on behalf of the principal manufacturer/brand owner. For the reasons to follow, this Court agrees with the Respondents and rejects the challenge raised by the Petitioners. W.P.(C) No. 1120 of 2015 3. W.P.(C) No. 1120 of 2015 is by Carlsberg India Pvt. Ltd. ( .....

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of Circular No. 334/13/2009 dated 6th July 2009. Challenge is also laid to a show cause notice ( SCN ) dated 22nd July 2014 issued to CIPL by the Additional Director General, Directorate General of Central Excise Intelligence ( DGCEI ), demanding service tax of ₹ 1,49,16,892 in respect of business auxiliary service provided by CIPL to M/s United Breweries Ltd. ( UBL ) for the period 23rd September 2009 to 30th June 2012 together with interest and penalty. 4. The relevant facts, as regards .....

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t is stated that in terms of the scheme of amalgamation approved by the High Court of Punjab & Haryana by order dated 24th March 2014, KBL amalgamated with CIPL. The appointed date for the amalgamation in terms of the above order was 1st April 2013. It is accordingly contended that the expression Petitioner in W.P.(C) No. 1120 of 2015 would mean CIPL as well as KBL which had merged with CIPL with effect from 1st April 2013. 5. KBL entered into an agreement with UBL on 7th February 2011 for t .....

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o provide the process of manufacture of beer under its brand name. It was KBL s responsibility for brewing, bottling, packaging, storing and selling of beer of the Kingfisher brand, including usage of all ingredients, raw materials, brewing specifications. All proceeds from the sale of beer were to be deposited in a bank account, jointly operated by KBL and UBL exclusively for beer produced under Kingfisher brand. The operational costs such as raw material etc. were to be met out of those accoun .....

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s invoices in respect of goods sold were raised by KBL. 7. It is stated that DGCEI initiated an investigation and searched the brewery premises and the office premises of KBL. During the course of search, various documents as well as information were recovered. Summons were issued to both KBL and UBL and statements were recorded under Section 14 of the Central Excise Act, 1944 ( CE Act ). After conclusion of the investigation the impugned SCN was issued on 22nd July 2014, where inter alia the ca .....

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edule to the Central Excise Tariff Act, 1985 ( CET Act ). Note 11 to Chapter 22 of the First Schedule to the CET which exclusively covered beverages, spirits and vinegar clarified that the said Chapter 22 did not cover alcoholic liquors for human consumption. Therefore, they did not fall within the definition of excisable goods as mentioned in Clause (b) of the Explanation to Section 65 (19) of the FA 1994. Thus, 'alcoholic liquor for human consumption' did not fall under the purview of .....

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itation could be invoked. The Petitioner had wrongly availed the exemption granted by Notification No. 39/2009-ST dated 23rd September 2009 and deposited service tax of ₹ 22,64,427 along with interest of ₹ 7,09,346 on 26th March 2013. 8. The concept of a 'negative list' of activities that would not be amenable to service tax was introduced by the FA, 2012 with effect from 1st July 2012. Section 66D which enumerated the negative list was inserted and under clause (f) therein a .....

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109 (2) of the FA 2015 substituted Clause (f) of Section 66D of the FA 1994 to provide for tax on services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption . In effect the manufacture of alcoholic liquor for human consumption was removed from the negative list by virtue of the amendment brought about by Section 109 (2) of the FA 2015. 9. Notification dated 19th May 2015 issued by the Central Government stated that .....

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of India ( ISWAI ) and All India Brewers Association ( AIBA ), praying for a declaration that Section 107 (f) and Section 109(2) of the Finance Act, 2015 are ultra vires the Constitution of India in so far as Section 66B read with the amended Section 66D and Section 65B(40) of the FA Act 1994 provides for service tax on the activity of manufacture of alcoholic liquor for another person. The Notification dated 19th May 2015 appointing 1st June 2015 as a date from which said provisions came into f .....

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L are permitted to be impleaded as co-petitioners in W.P. (C) No. 5498 of 2015. 11. The third petition i.e. W.P.(C) No. 5713 of 2015 is by the Confederation of Indian Alcohol Beverages Companies ( CIABC ), an apex body of the branded segment of the leading Indian made foreign liquor manufactures and marketers which has been formed with the object of promoting and protecting the interests of the members in the business of alcoholic beverages. The prayers in these petitions are identical to the pr .....

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he taxing entries must be given a liberal interpretation, it must be such as not to bring within the purview of a Union taxing entry, a tax which falls within the domain of the state legislature. (ii) In the present case, the two competing entries are Entry 51 of List II of the Seventh Schedule which provides for State Legislature to make laws for levy of duties of excise on alcoholic liquors for human consumption and Entry 97 of List I which permits Parliament to make laws on any other matter n .....

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be charged to service tax by the Parliament. By amending Section 65(19) of the FA 1994, the Parliament was seeking to usurp the exclusive jurisdiction of the State Legislature to levy excise duty on the manufacture of alcoholic liquor for human consumption. Inasmuch as the service tax is a value added tax and is leviable on an activity of professional service and not on the activity of manufacture of goods, the amendment to Section 65(19) of the FA 1994 is a colourable exercise of legislative p .....

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nd service tax was sought to be levied. In other words the taxable event continued to be the manufacture of liquor, whether it was done for oneself or for another person. Therefore, on the very same nature and aspect of the activity there could not be two levies namely excise duty and service tax. (v) Reliance is placed on the decision in Navinchandra Mafatlal v. CIT (1954) 26 ITR 758 (SC), wherein it was emphasised that the words of a legislative entry had to be given the widest possible scope .....

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relevance to determine its real character and what has to be examined is the true nature of the tax imposed in reference to the charge, i.e. the taxable event and the incidence of levy. Here it was the manufacture of alcoholic liquor for human consumption. A reference is placed on the decisions in State of Kerala v. Maharashtra Distilleries Ltd. (2005) 11 SCC 1 and Municipal Council, Kota v. Delhi Cloth & General Mills Co. Ltd. (2001) 3 SCC 654. (vi) It is pointed out that the Entry 51 of Li .....

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x on manufacture of liquor on job work basis, that would be covered under Entry 51 of List II. Consequently, levy of service tax on such job charges are unconstitutional and could not be sustained on the basis of Entry 97 of List I. The reference is made to Notification No. 119/1975-CE dated 30th April 1975, which levied excise duty only on the activity of manufacture on job work basis and that too only on the job work charges. (vii) Referring to the decision in All India Federation of Tax Pract .....

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Kerala Bar Hotels Association 2014 (36) STR 1205 (Ker.). (viii) Mr. Lakshmikumaran also sought to distinguish the contract manufacture arrangement as in the case of agreement between KBL and UBL as distinguished from a brand licensing arrangement or the lease arrangement. In a brand licensing arrangement, the brand owner gives the right to exploit its intellectual property rights ( IPR ) to the manufacturer. The right to use the IPR is an identifiable activity separate and independent from the a .....

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equently, when the activity was already covered by Entry 51 of List II, namely the activity of manufacture of alcoholic liquor for human consumption, then the question of resorting to Entry 97 of List I to justify the levy of service tax did not arise. Submissions of the Respondents 13. In reply to the above submissions, it is submitted by Mr. Sanjay Jain, learned Additional Solicitor General of India, on behalf of the Respondents as under: (i) The service tax in the present case was not being l .....

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ufacturer. The brand owner apart from giving permission to such manufacturer is not directly involved in manufacture and retail of alcohol. In such instance, the taxable service was the service by way of grant of permission by the brand owner to the licensee to use the brand name for sale of alcohol. (iii) There can be an arrangement of lease whereby the Lessee could produce alcoholic beverages for the owner of the production facilities. The consideration was in the form of rent paid to the owne .....

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ial retail but for the commercial use by the principal manufacturer (brand owner). The cost of raw materials and in some cases even the capital goods and other expenses are either reimbursed or paid by the brand owner. The statutory levies including State excise duty are also to be reimbursed to the outsourced manufacturer by the brand owner. The alcoholic beverages are sold by or under the directions of the brand owner and the profit or loss on account of manufacturing and sale of alcoholic bev .....

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is they have claimed to enter into Contract Manufacturing Agreements, which is the third category. (vii) Internationally, the services of contract manufacturing of beverages including ethyl alcohol, spirits, liqueurs, wines, malt, malt liquors and other spirituous beverages and the manufacturing services on physical inputs owned by others have been recognized. Attention has been drawn to the Division 24 and Division 88 of the Central Product Classification ( CPC ) for goods and services circulat .....

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ufacturing alcohol for another person is distinct from the activity of manufacture of alcohol for one s own per se, it cannot be said that service tax is levied on the same activity on which the State excise duty is also levied. In other words the Parliament is not seeking to legislate on a topic exclusively within the domain of the State under Entry 51 of List II of the Seventh Schedule of the Constitution. (x) Reliance is placed on the decisions in State of Madhya Pradesh v. Rakesh Kohli (2012 .....

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ion 65 (19) and Section 65 (76b) of the FA 1994 as it stood prior to 1st September 2009. An amendment was carried out with effect from 1st September 2009 to enable levy of service tax on contract manufacture of alcohol. By Notification dated 5th June 2012, both Sections 65 (19) and 65 (76b) of the FA 1994 were declared to be not applicable since manufacture of alcoholic beverage was included in the negative list. However, the activity of manufacture of alcohol did not include contract manufactur .....

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(1979) 4 SCC 232. Analysis of Constitutional Provisions 14. The Court proposes to first examine the scheme of the relevant constitutional provisions. Article 245 of the Constitution provides that the Parliament may make laws for the whole or any part of the territory of India and the legislature of a State may make laws for the whole or any part of the State. However, Article 245 (1) opens with phrase subject to the provisions of this Constitution. Article 246 (1) provides that notwithstanding a .....

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ave exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule of the Constitution , i.e., State List. 15. Under Entry 84 of List I read with Article 246 (1) Parliament has the exclusive legislative power to enact a law for levy and collection of excise duty on the manufacture of alcoholic liquor, tobacco and other goods manufactured or produced in India except alcoholic liquors for human consumption and narcot .....

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ive competence of Parliament to enact a taxing statute, it has to be first ascertained whether the tax legislation in question is covered by any specific entry in List II. If it does not fall under List II, then it can safely be traced to the residuary entry in the Union List. The specific observations in para 67 of the judgment in this regard, reads as under: 67. .....If there had been no list I, many items in List II would perhaps have been given much wider interpretation than can be given und .....

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tutional enactment conferring legislative power the most liberal construction should be put upon the words so that the same may have effect in their widest amplitude. Relevant provisions of the FA 18. Before commencing the discussion of the legal principles involved in the constitutional challenge posed in these petitions, it is necessary to refer to the relevant provisions of the FA which are the subject matter of such challenge. 19. Under Section 65B (44) of the FA 1994, service is defined as .....

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; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. Explanation 1. - For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply to, - (A) the functions performed by the Members of Parliament, Members of State Legislative, Members of Panchayats, Members of Municipalities and Members of other local authorit .....

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rposes of this clause, transaction in money shall not include any include any activity relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. Explanation 3. - For the purposes of this Chapter, - (a) an unincorporated association or a body of persons, as the case may be, and a member thereof shall be treated as distinct persons; (b) an establishme .....

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ereinafter referred to as the service tax) at the rate of twelve per cent on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed. 21. Section 66D of the FA 1994 is titled Negative list of services . It states that the negative list shall comprise the different services and in particular Clause (f) of Section 66D included any proces .....

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ic drugs and narcotics on which duties of excise are leviable under any State Act for the time being in force. 23. A Negative list regime of Service Tax came to be introduced only by FA 2012 with effect from 1st July 2012. Prior to 1st July 2012, under Section 65 (19) of FA 1994 business auxiliary service , a taxable service, included within its ambit production or processing of goods for, or on behalf of the client but did not include any activity that amounts to manufacture of excisable goods. .....

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the further changes in 2015 by amendment to the FA was to inter alia bring within the net of service tax, the activity of manufacture 'for another person' of alcoholic liquor for human consumption. Pith and substance doctrine 25. The case of the Petitioners is that by amending Section 65(19) of the FA 1994, the Parliament was seeking to usurp the exclusive jurisdiction of the State Legislature to levy excise duty on the manufacture of alcoholic liquor for human consumption. It is submit .....

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through another by way of job work. The competing entry, relied upon by the Respondents to sustain the legislation, is Entry 97 of List I which is the residual entry. The question that then arises is whether 'in pith and substance' the provisions under challenge seek to levy service tax on manufacture per se of alcoholic liquor for human consumption, or on the service aspect of the manufacture which is undertaken by one entity for another on job work basis? 27.1 In M/s. Hoechst Pharmaceu .....

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t Section 5 of the BF Act which has the heading Levy of tax on the sale and purchase of goods in Bihar is relatable to Entry 54 of List II of the Seventh Schedule. Whereas the appellants contended that the field of price fixation of essential commodities was an occupied field by virtue of various control orders issued by the Central Government under sub-Section 3 (1) of the Essential Commodities Act, 1955 which allows the manufacturer or producer of goods to pass on the tax liability to the cons .....

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ntry 54 of the State List. The Court referred to Article 254 which provided for the method of resolving conflicts between a law made by the Parliament and a law made by the legislature with respect to matter falling in the Concurrent List. The Supreme Court explained that the various entries in three lists were not powers of legislation but fields of legislation . It was emphasized that the power to tax cannot be deduced from a general legislative entry as an ancillary power . It was pointed out .....

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an attempt should be made to see whether the two entries cannot be reconciled so as to avoid a conflict of jurisdiction. It should be considered whether a fair reconciliation can be achieved by giving to the language of the Union Legislative List a meaning which, if loss wide than it might in another context bear, is yet one that can properly be given to it and equally giving to the language of the State Legislative List a meaning which it can properly bear. The non obstante clause in Article 24 .....

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there is a distinction made between general subjects of legislation and taxation. The general subjects of legislation are dealt with in one group of entries and power of taxation in a separate group. In M.P.V. Sundararamier & Co. v. State of A.P. 1958 SCR 1422, this Court dealt with the scheme of the separation of taxation powers between the Union and the State by mutually exclusive lists. In List I, Entries 1 to 81 deal with general subjects of legislation; Entries 82 to 92-A deal with tax .....

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fficult to comprehend the submission that there can be intrusion by a law made by Parliament under Entry 33 of List III into a forbidden field viz., the State s exclusive power to make a law with respect to the levy and imposition of a tax on sale or purchase of goods relatable to Entry 54 of List II of the Seventh Schedule. It follows that the two laws viz., sub-section (3) of Section 5 of the Act and Paragraph 21 of the Control Order issued by the Central Government under sub-section (1) of Se .....

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of the State legislature must be clearly established. Entry 97 itself is specific in that a matter can be brought under that Entry only if it is not enumerated in List II and List III and in the case of a tax if it is not mentioned in either of those Lists. In a Federal Constitution like ours where there is a division of legislative subjects but the residuary power is vested in Parliament such residuary power cannot be so expansively interpreted as to whittle down the power of the State Legislat .....

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ctrine in the following words: "As stated above, every entry in the Lists has to be given a schematic interpretation. As stated above, constitutional law is about concepts and principles. Some of these principles have evolved, out of judicial, decisions. The said test is also applicable to taxation laws. That is the reason why the entries in the Lists have been divided into two groups, one dealing with general subjects and other dealing with taxation. The entries dealing with taxation are d .....

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it has a substantial connection with the entry, the matter may be taken to be legislation on the topic. That is why due weightage should be given to the words 'with respect to' in Article 246 as it brings in the doctrine of 'pith and substance' for understanding the scope of legislative powers." 30. If the 'pith and substance' doctrine is applied in the instant case, it is evident that while Entry 51 of List II envisages manufacture of alcoholic liquor for consumpti .....

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sent case, to recapitulate the case of the Respondent, service tax on contract manufacturing of alcoholic beverage for human consumption can be legislated validly by the Parliament with respect to Entry 97 in List I. The case of the Petitioner on the other hand is that Parliament lacks the legislative competence to do so since the activity is essentially one of manufacture of alcoholic liquor for human consumption which is squarely and entirely covered by Entry 51 of the State List. 32. The aspe .....

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of manufacture being undertaken by one entity for another. It is this aspect of service involved in job work that is sought to be captured here and made amenable to service tax. 33. In Federation of Hotel and Restaurant Association of India v. Union of India (1989) 3 SCC 634 the Supreme Court explained the concept in the following passages wherein: 30. .......subjects which in one aspect and for one purpose fall within the power of a particular legislature may in another aspect and for another p .....

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lly it might seem that one and the same activity is made the subject of two imposts, in pith and substance what is made amenable to one of the imposts, in this case service tax, is the 'service' aspect of job work and not the activity of manufacture by an entity for and by itself per se. 35.1 In All India Federation of Tax Practitioners v. Union of India (supra), the Supreme Court was examining if there was an overlap between profession tax covered under Entry 60 of List II and service t .....

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es" fall into two categories, namely, property-based services and performance-based services. Property based services cover service providers such as architects, interior designers, real estate agents, construction services, mandapwalas, etc. Performance based services are services provided by service providers like stockbrokers, practising chartered accountants, practising cost accountants, security agencies, tour operators, event managers, travel agents, etc." 35.2 The Court then exp .....

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advice or for auditing of accounts. Similarly, a cost accountant charges his client for advice as well as doing the work of costing. For each transaction or contract, the chartered accountant/cost accountant renders profession-based services. The activity undertaken by the chartered accountant or the cost accountant or an architect has two aspects. From the point of view of the chartered accountant/cost accountant it is an activity undertaken by him based on his performance and skill. But from t .....

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ring within the service tax net the activity of job work involved in the manufacture of alcoholic liquor for human consumption. 37. Although several types of arrangements by which the job work undertaken by one entity for another were referred to, the case involving KBL and UBL appears to be one of contract manufacturing. In any event, this need not by itself detain the Court as that should be the task of the adjudicating authority called upon to adjudicate the SCN issued. Suffice it to note tha .....

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a service i.e. any activity carried out by a person for another person for consideration. Therefore, a manufacturing activity undertaken by an entity for itself cannot be said to be a service provided to anyone and definitely not to itself. Therefore, that activity of manufacture by the brand owner who is also a licence holder could not be said to be amenable to service tax. However, where manufacturing of alcoholic liquor for human consumption is not manufactured by the entity holding licence/b .....

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ity of manufacture of alcoholic liquor for human consumption, when undertaken by one entity for another, is negatived. 39. There is a marked change in the position that the FA 2015 and the amendment it brought about to Section 65B of the FA 1994. Under Section 107 (f) of FA 2015, Clause (40) of Section 65B of FA 1994 would no longer contain the word alcoholic liquors for human consumption . Section 109 (2) of FA 2015 further substitutes clause (f) of Section 66D of FA 1994 with services by way o .....

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by one party to another and therefore, amenable to service tax. It is traceable to Entry 97 of List I as it does not fall within the ambit of any of the taxing entries in List II. Failed challenges to levy of service tax 41.1 It is of interest, and perhaps not a mere coincidence, that the challenges to the constitutional validity of service tax levy in different contexts have by and large failed. In Gujarat Ambuja Cements Limited v. Union of India (supra) the legislative competence of Parliament .....

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h reference to the object of the levy and not with reference to its incidence or machinery. It is explained that the subject matter of the tax, as far as the provision of the FA 1994 is concerned, was not goods and passengers, but the service of transportation itself. It is a levy distinct from the levy envisaged under Entry 56. It may be that both the levies are to be measured on the same basis, but that does not make the levy the same. 41.2 The Supreme Court in Gujarat Ambuja Cements Limited v .....

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f List II. Therefore the negation of the Petitioners submission perforce leads to the conclusion that the Act falls within the residuary power of Parliament under Entry 97 of List I. 42.1 In T.N. Kalyana Mandapam Association v. Union of India (supra), an amendment was made in 1997 to the FA 1994 to the effect that the services provided by mandap-keepers including services, if any, rendered as a caterer were exigible to tax. This was challenged on the ground that in its pith and substance, the pr .....

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cannot be levied on the service aspect of catering. ... 42.2 The Court further observed as under: 55. In fact, making available a premises for a period of a few hours for the specific purpose of being utilized as a mandap whether with or without other services would itself be a service and cannot be classified as any other kind of legal concept. It does not certainly involve transfer of a movable property nor does it involve transfer of movable property of any kind known to law either under the .....

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he providing of telephone connection may be a composite contract of service and sale. While there may be a transfer of a right to use goods in the providing of access or a telephone connection by the telephone service provider to a subscriber, at the same time there was also the provision of the service itself. It was pointed out that the decision in BSNL v. Union of India (supra) recognises the aspect doctrine. The Court did not permit the State to levy taxes on the service aspect and upheld th .....

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India (supra) was dealing with Section 65(19) and Section 65(76b) of the FA 1994 as it existed prior to September 2009. There was no question of considering whether service tax on contract manufacturing which has now been clearly defined by way of amendment to Section 66D(f) could be subject to service tax. With the negative list coming into effect from 1st July 2012, the two entries that were considered in Maa Sharda Wine Traders v. Union of India (supra) were removed from the ambit of the serv .....

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f different aspect of the same activity being subject to service tax. 47.1 The decision in Association of Leasing and Finance Services v. Union of India (supra) dealt with financing and leasing services undertaken by banks and financial institutions. The challenge was to the validity of Section 65(12)and Section 65 (105) (zm) insofar as they seek to levy service tax on leasing and hire purchase. It was contended that insofar it also related to finance and leasing services including equipment lea .....

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The former was eligible to service tax whereas the latter would be eligible to local sales tax/VAT. It was pointed out that financing as an activity was different and distinct from lease/hire purchase in the essence. It was held: "...the activities undertaken by NBFCs of equipment leasing and hue- purchase finance are facilities extended by NBFCs to their customers; that, they are financial services rendered by NBFCs to their customers and that they fall within the meaning of the words ' .....

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ce which is rendered by the finance company to its customer(s). The value of taxable service under Section 67 is income by way of interest/finance charges (measures of tax) which is not determinative of the character of the levy. Thus Section 67 of the Finance Act, 1994 seeks to tax financial services rendered by the appellant(s) with reference to the income which the appellant(s) earns by way of interest/finance charges. The challenge was, therefore, negatived. 48. Learned counsel for the Petit .....

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tax on land (Entry 49 List II). In Gujarat Ambuja Cements Limited v. Union of India (supra) service tax was sought to be levied on the 'transportation service' and the competing entry was 'tax on goods or passengers' under Entry 56, List II. In All India Federation of Tax Practitioners v. Union of India (supra) service tax was on the rendering of professional service and the competing entry was tax on profession, based on status under Entry 60 of List II. In Association of Leasi .....

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emained outside Entry 51 of List II and thereby attracted any other levy including a service tax. 49. It is not possible to agree with the above submission when a clear distinction is discernible between manufacture of such alcoholic liquor by oneself and for another. The latter partakes the character of rendition of a service which is not possible to be accommodated within the act of manufacture by oneself. The act of manufacturing for another by way of job work answers the plain definition of .....

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vy of service tax. In his budget speech on 28th February 2015, the Finance Minister explained, inter alia, that service tax was "to be levied on service by way of carrying out any processes as job work for production or manufacture of alcoholic liquor for human consumption" It is significant that the Respondents in their written submissions have confirmed that "service tax is only being imposed on the value of the services provided by the job worker/contract manufacturer and not o .....

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