TMI Blog2018 (10) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... so evident that only after the verification action by the department started, the appellant had filed the first return on 24.10.2006 claiming exemption under Notification No.8/2005-ST dt.01.03.2005. Mere allegation against Magna Electro Castings Ltd., that too in passing, in para 10.5 of the SCN dt.15.05.2008 and in para-2 of the SCN dt. 16.10.2008 cannot be taken as a bulwark for initiating proceedings against their job workers, the appellants herein. The activities carried out by the appellant will indeed amount to manufacture for the purpose of Section 2(f) of the Central Excise Act,1994 and in consequence, the same will not be a Business Auxiliary Service under Section 65 (19) of the Finance Act, 1994 and therefore no service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pay service tax on behalf of the client under the category of Business Auxiliary Service during the period 10.9.2004 to 31.07.2006 amounting to ₹ 43,83,331/- and Education Cess of 87,667/- with interest thereon and imposition of penalties under Section 76, 77 78 of the Act. In adjudication, the original authority vide an Order dated 11.08.2009 confirmed demand of service tax of ₹ 41,97,593/- and Educatin cess of ₹ 26,287/- with interest thereon and imposition of equal penalty under Section 78 ibid as also penalty under Section 76 ibid. In appeal, the Commissioner (Appeals) vide an Order No.41/2010-ST dt. 11.05.2010 set aside the demand for the period prior to 16.06.2005, set aside the penalty under Section 76 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nents. After such process, the emerging components are used as components of locomotives, hydraulic values, automotives etc., The rough castings received by the appellant are not capable of being used for any specific purposes and after the processed carried out by the appellant, they attain the character of specific components with specific use, whey they did not possess hitherto. Hence the activities undertaken by the appellant would amount to manufacture . ii. Reliance is places in the following decisions; (1) Paramount Centrispun Castings 1995 (77) ELT 705, upheld by Supreme court in 1996 (83) ELT A176 SC; (2) Metal forgings 1998 (102) ELT A224 SC (3) Brakes India 1998 (101) ELT 241 SC (4) Vishal Malleable Ltd 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the department on 22.1.2005 itself for providing BAS. However, they had not filed any periodical ST-3 returns. In the first return filed on 24.10.2006, appellants had claimed exemption under Notification No.8/2005-ST dt. 1.3.2005. Ld. AR contends that as per the said notification, the exemption will only be available only in case when goods which has been produced by the appellants are returned back to the principal manufacturer for use in or in relation to manufacture of any other goods. Ld. A.R submits that when the principal manufacturer M/s.Magna Electro Castings Ltd. were not using returned goods for manufacture of final product but only doing inspection and packing, the benefit of Notification No.8/2005-ST will not be applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in para-2 of the SCN dt. 16.10.2008 cannot be taken as a bulwark for initiating proceedings against their job workers, the appellants herein. 5.3 On the other hand, the appellants have been crying hoarse all along that the activities carried out by them do amount to processing of manufacture. The case laws relied upon by the Ld.Advocate also have consistently reiterated that subjecting crude castings to machining and drilling processes amount to manufacture . SCNs also did not dispute that appellant performed machining, drilling, milling etc. on the rough castings supplied by the client. 5.4 In the circumstances, the activities carried out by the appellant will indeed amount to manufacture for the purpose of Section 2(f) of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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