TMI Blog2022 (3) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... one activity was of painting on job work basis, which is akin to powder coating and anodizing - Following the said judgment, in the present case also being the similar activity, the process of Powder Coating and Anodizing being production on behalf of client clearly falls under BAS and hence the same is liable for service tax. The appellant s main plea is the activity of job work since with material such as chemicals will fall under the Works Contract Service on the ground that on the said activity the appellant has discharged the VAT - the activity of the job work in the present case does not fall under Explanation clause (ii). As regard the clause (i), the necessary limb of the definition is the property in the goods must be transferred. In this case, claim of the appellant is that the property in the chemicals used for the job work stand transferred to the service recipient. Undisputedly the chemicals used for Powder Coating and anodizing is part of the service as the same gets consumed during the job work and lost its existence. Moreover the main aluminium goods is supplied by the client and it s property remains with the client before and after the job work. The cost of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar, learned Additional Commissioner(AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that the major material on which the job work was carried out i.e. aluminium goods was supplied by the client of the appellant; the appellant have merely carried out the processing of powder coating and anodizing, thereafter the same was returned to the appellant s client. He further submitted that this activity is clearly covered under production or processing on behalf of the client and the same is covered under BAS and therefore the same is taxable. He submitted that similar activity has been considered under Business Auxiliary Services in various judgments. He placed reliance on the following judgments:- i. MR Sons Vs. CC, Ahmedabad [2018(8) TMI 32 CESTAT Ahmedabad] ii. PSL Corrosion Control Services Ltd. Vs. CCE C, Daman [2008(8) TMI 72 CESTAT Ahmedabad] iii. Shri AG Shibu and Shri TH Muhammed Ali Vs. CC,E ST, Cochin [2008(1) TMI 265 CESTAT Bangalore] iv. AG Shibu Vs. CC,CE ST, Cochin [2008(1) TMI 105 CESTAT Bangalore] 4. We have carefully considered the submissions made by both sides and perused the records. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law that when an expression is defined in the statute, the same has to be understood and interpreted in the light of the language used in the definition. 10 . The manufacture stands defined in terms of the provisions of Section 2(f) of the Central Excise Act. Section 65(19) of the Finance Act, 1994 defines the Business Auxiliary Service as production of goods , which does not amount to manufacture in terms of Section 2(f) of Central Excise Act. As such, it becomes clear that any production of goods, which amount to manufacture by passing strict test of Section 2(f) would not be covered by the expression production of goods . Every production may not necessarily amount to manufacture but every manufacture would be covered by the expression production . As observed by the Hon ble Supreme Court in the case of Tara Agencies referred supra, the expression production has a wider meaning than the word manufacture . If the meaning of the expression production as appearing in the definition of the above Services has to be limited to the fact that that the activity must result in emergence of new goods i.e. manufacture than the clarification below the definition of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents : Board s Circular No. B2/8/2004-TUR, dated 10-9-04 : 18.2..... Similarly, if a commercial concern produces goods on behalf of the client or provides service on behalf of a client, such activities would come under the scope of this service, unless the activity of service provider amount to manufacture in terms of the central excise law. The aim of all such activities is production of goods or provision of services, the whole or part of which is being carried out by the service provider i.e. the agent on behalf of the client . Board s letter F.No. 127/171/2007-CX.4, dated 18-7-04 : 3...... Further, the activity also does not qualify to be called as provision of service on behalf of the client. This is because the taxable activity envisaged under this category of business auxiliary service is that while the client is obliged to provide some service to a 3rd person but instead of the client providing such service, the service provider provides the such service to the 3rd person, on behalf of the client, i.e. acting as an agent of the client. Admittedly, in the present case, there is no 3rd person. Thus, the activity so undertaken does not fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain contractors in furtherance of providing their service to the State Road Development Corporation Ltd. As such, the said main contractors instead of themselves doing the job of epoxy coating are getting the same done from the appellants by utilizing their services. As such, we do not find any merits in the second limb of the argument advanced by the learned Advocate, Shri B.L. Narasimhan. 14 . It further stands argued before us that inasmuch as the definition of business auxiliary service was amended with effect from June, 2005 so as to include the production of goods for the clients , and inasmuch as they are producing the goods for the main contractors, they can be held liable to pay duty only from June, 2005 as the said amendment cannot be made retrospective. As we have already observed that the appellant s activities were covered even under un-amended definition of business auxiliary service , the above argument of the learned Advocate does not carry much weight. 15 . Having discussed the various issues in the preceding paragraphs, we hold that the appellants are liable to pay service tax in respect of the activity undertaken by them during the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation about the said activity amounting to manufacture or not, was going on between the Department and the appellants. With the introduction of the said services in the service tax net with effect from 10-9-04, even the Revenue never advised the appellants to start paying tax on the said activity. As the Revenue was aware of the appellant s activities, it cannot be said that was any suppression, misstatement or intent on their part to evade service tax. We, accordingly, do not find any reason for imposition of penalty upon the appellants and set aside the same in terms of Section 80 of the Finance Act, 1994. 18 . As a result, the appellants are held liable to pay duty, which is required to be re-quantified by the jurisdictional authorities, for which purpose the matter is being remanded penalty is being set aside. 19 . Appeal is disposed of in above terms . 5. From the above judgment it can be seen that even mere epoxy coating was held to be production on behalf of the client, whereas in the present case much more processing of machining, shot blasting, drilling were carried out in addition to painting, therefore, in view of cited judgment the activity carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; 6.2. On going through the above definition, we find that the activity of the job work in the present case does not fall under Explanation clause (ii). As regard the clause (i), the necessary limb of the definition is the property in the goods must be transferred. In this case, claim of the appellant is that the property in the chemicals used for the job work stand transferred to the service recipient. Undisputedly the chemicals used for Powder Coating and anodizing is part of the service as the same gets consumed during the job work and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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