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TMI Blog2019 (2) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... P) to undertake the job of processing and recovery of iron and steel scrap supplied to it by the latter. In terms of the contract with BSL, the appellant was required to undertake processing and recovering of scrap by employing processes such as, screening, digging, magnetic separation etc.. The processes were required to carried out in the premises of BSP and the iron and steel scrap so recovered were to be returned to BSL for manufacture of excisable goods there from. The Department was of the view that for the consideration received from BSL, the appellant was required to pay service tax under the category of "Business Auxiliary Service". The show-cause notice dated 15.04.2008 was issued to the appellant in this regard proposing levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period, no service tax will be liable to be paid since the appellant will be entitled to the benefit of Notification No.8/2005-ST dated 01.03.2005. This Notification provides exemption in respect of service of production or processing of goods for or on behalf of the client, as provided under sub-clause (b) of Clause (19) of Section 65 of the Finance Act, 1994. 5.3 Finally, he submitted that the service tax liability may be set aside. 6.1 The ld.D.R. justified the impugned order. He referred to the findings of the adjudicating authority regarding the entitlement of the appellant for the benefit of Notification No.8/2005 ibid. He submitted that the adjudicating authority has considered the said Notification, but held that the appellant wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be paid for the services of "production of goods for or on behalf of the client". In this connection, we note that identical issue in respect of the appellant's other unit which carried the activity at M/s SAIL (Bhilai Steel Plant) came before the Delhi Bench of the Tribunal. The Tribunal held that there was no liability for payment of service tax upto 16.06.2005 on such activity. By following the above decision, we set aside the demand for service tax for the period upto 15.06.2005. 9. Next we consider the liability for the period w.e.f.16.06.2005. When we consider the definition in sub-clause (v) of Section 65(19) for the period prior to and subsequent to 16.06.2005, we note that for the later period, the definition has included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [processing] of goods" means working upon raw materials or semi-finished goods so as to complete part or whole of production [or processing], subject to the condition that such production [or processing] does not amount to "manufacture" within the meaning of clause (f) of section 2 of the Central Excise Act, 1944 (1 of 1944). (ii) "appropriate duty of excise" shall not include 'Nil' rate of duty or duty of excise wholly exempt." 10. The activities carried out by the appellant for BSP is in the nature of processing. It is evident from the record that the appellant was required to recover of iron steel scrap from various stages of manufacture and the collected scrap was to be returned to BSP, but the benefit was denied to the appellant b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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