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2016 (8) TMI 250 - DELHI HIGH COURT

2016 (8) TMI 250 - DELHI HIGH COURT - 2016 (44) S.T.R. 349 (Del.) - 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. .....

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cating authority - writ petition dismissed decided in favor of revenue - 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 .....

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y Clause (f) of Section 107 and Clause (2) of Section 109 of Finance 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 Pe .....

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rliament to levy and collect. The topic of legislation is sought to 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 .....

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the Central Board of Excise & Customs ( CBEC ) by Para No. 3.1 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 to .....

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er manufactured by it, whether under its own or other brand names. It 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. .....

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y 2011, UBL's only responsibility was branding of the beer and to 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 operationa .....

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rocessing, manufacturing, selling and distribution of beer. The sales 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 th .....

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Act was defined as those goods specified in the First and Second Schedule 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 .....

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and wilful misstatements and, therefore, the extended period of limitation 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 enum .....

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ption occurring in Section 65B (40) of the FA 1994. Further Section 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. Notificat .....

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498 of 2015 is by the International Spirits & Wines Association 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 appoi .....

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erein, their application CM 10428 of 2015 is allowed and GSL and AIPL 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 alcohol .....

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ng entries to be construed so as to maintain exclusivity. Although the 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 o .....

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( VAT ) for their activity. The said activity, therefore, could not 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 Sec .....

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) It is the same activity of manufacture on which both excise duty and 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 wor .....

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oned in either of those Lists . The nomenclature of levy was not of 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. L .....

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dia (1989) 3 SCC 488. Thus if the State Legislatures were to levy tax 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. .....

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CC 1 and the judgment of the Kerala High Court in Union of India v. 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 .....

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s taxes on services it had not yet been brought into operation. Consequently, 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 Responden .....

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d reward of the products so manufactured, rest with the licensee/manufacturer. 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 fa .....

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vice provided by the job worker who produces alcohol not for commercial 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 .....

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in are contract manufacturers of alcoholic beverages and on that basis 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 Ce .....

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both aspects. (ix) Since the aspect of rendering of services by manufacturing 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 plac .....

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09 (15) STR 3 (MP) is distinguishable since it was dealing with Section 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 ac .....

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Devi (2008) 4 SCC 720 and Sat Pal and Co. v. Lt. Governor of Delhi (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 o .....

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subject to clauses (1) and (2), the legislature of any State would have 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 produce .....

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had to residuary Entry 97 of the Union List, to explain the legislative 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 per .....

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a), the Supreme Court explained that in construing words in a constitutional 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 challeng .....

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he Constitution; or (iii) a transaction in money or actionable claim; (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 Panch .....

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before the commencement of this section. Explanation 2 - For the purposes 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 mem .....

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ce tax on and after Finance Act, 2012 There shall be levied a tax (hereinafter 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 serv .....

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c liquors for human consumption, opium, Indian hemp and other narcotic 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 .....

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under the head of business and auxiliary services. 24. The effect of 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 .....

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consumption is concerned, whether it is manufactured by oneself or 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 .....

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nstitutionally valid. It was sought to be defended on the ground that 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 manufa .....

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termine whether in its pith and substance it is a law relatable to Entry 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 .....

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t giving a narrow and restricted sense to either of them. Secondly, 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 meani .....

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en proceeded to observe as under: 76. It would therefore appear that 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 wi .....

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of the Union and of the States cannot arise. That being so, it is difficult 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 Contro .....

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ment by resort to the residuary power, the legislative incompetence 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 expans .....

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ra), the Supreme Court explained the 'pith and substance' doctrine 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 .....

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of the said doctrine is to look at the legislation as a whole and if 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 5 .....

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ached by employing the 'aspect doctrine' as well. In the present 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 squar .....

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fficult to envision such value addition as a result of the activity 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 .....

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om the distinctiveness of the aspects. ... 34. Therefore while facially 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 be .....

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of services. Therefore, for our understanding, broadly "services" 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 operator .....

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st accountant/chartered accountant/architect charges his client for 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 activ .....

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to recognise the legislative competence of Parliament in seeing to bring 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 author .....

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as Section 65B (44) of the FA 1994 is concerned is the rendering of 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 h .....

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ssion 'business auxiliary service' did not exclude the activity 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 sub .....

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consumption on contract basis has to be viewed as services rendered 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 Limite .....

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ction of the tax. The legislative competence is to be determined with 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 .....

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s that the Act is referable to any other entry apart from Entry 56 of 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 .....

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d in the said service can be levied does not mean that a service tax 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 tr .....

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rs to be misplaced. The question involved in that case was whether the 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 no .....

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of Madhya Pradesh Full Bench in Maa Sharda Wine Traders v. Union of 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 Trade .....

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nsofar as the job work element is concerned. There was no question of 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 .....

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ng transaction and the equipment leasing/hire purchase transaction. 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 the .....

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tion." 47.2 It was observed that the taxable event is the service 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 ch .....

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that were distinct were tax on sale of food (Entry 54 List II), and 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 .....

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o other activity or even 'an aspect' of that activity that remained 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 manufactu .....

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the latter aspect which is unique to job work for the purposes of levy 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 .....

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