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TMI Blog2023 (9) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... . Samota, learned Superintendent (AR) appearing on behalf of the Revenue reiterates the grounds of appeal. He submits that the appellant have provided the service in the premises of M/s L&T, therefore, the appellant is only a service provider and if at all the activities amount to manufacture, it is the M/s L&T who is a manufacturer hence the respondent is clearly a service provider,hence liable to pay the service tax under Business Auxiliary Service is on the respondent. 3. None appeared on behalf of the respondent despite notice. 4. On careful consideration of the submission made by AR and perusal of records, we find that as per the facts of the case, the respondent have undertaken the job of various activities such as welding, fabrication, cutting, binding and other related activities for the purpose of manufacture of ship on behalf of M/s L&T. The learned Commissioner (Appeals) after detailed analysis came to the conclusion that the appellant's activity is amount to manufacture of excisable goods, therefore, the same is excluded from the definition of Business Auxiliary Service, hence not liable to service tax. The related finding of the learned Commissioner (Appeals) is repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account." 9. further find that the issue is settled by the decision of the Hon'ble Supreme Court of India in the case of M/s. Grasim Industries Ltd. vs. UOI [2011 (273) ELT 10 (SC)] wherein it was held as under:- "The manufacture in terms of Section 2(f) includes any process incidental or ancillary to the completion of the manufactured product. This 'any process can be a process in manufacture or process in relation to manufacture of the end product, which involves bringing some kind of change to the raw material at various stages by different operations. The process in manufacture must have the effect of bringing change or transformation in the raw material and this should also lead to creation of any new or distinct and excisable product. The process in relation to manufacture means a process which is so integrally connected to the manufacturing of the end product without which, the manufacture of the end product would be impossible or commercially inexpedient. This Court in several decisions star ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting or service provided by the client; or iii) Any customer care service provided on behalf of the client; or iv) Procurement of goods or services, which are inputs for the client, or Explanation -For removal of doubts, it is hereby declared that for the purpose of this sub clause, "inputs" means all goods or service intended for use by the client v) Production or processing of goods for, or on behalf of the client; or vi) Provision of service on behalf of the client; or vii) a service incidental or auxiliary to any activity specified in sub clause (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any activity that amounts to "manufacture of excisable goods. "Excisable goods has the meaning assigned to it in clause (d) of Section 2 of the Central Excise Act, 1944." From the above given definition of BAS, it is crystal clear that any activity that amounts to 'manufacture' within the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the activity of the service provider does not amount to"manufacture within the meaning of clause ( of Section 2 of the Central Excise Act, 1944," The contents of the said Instruction are squarely applicable in the present case and therefore the observation of the adjudicating authority that Notification No.8/2005-ST is applicable in this case is not sustainable. 14. Further it is settled position of law, upheld in number of cases that the manufactured excisable goods if found mentioned in the first schedule to the Central Excise Tariff Act, 1985, does not cease to be excisable goods just because the rate of duty is Nil rate or they are fully exempted from payment of Central Excise duty. Hence, definition of manufacture within the meaning and scope of Section 2(f) of Central Excise Act, 1944, is relevant and applicable in subject case, so long as 'Ships' are found to be mentioned in the IInd Schedule to Central Excise Tariff Act, 1985; and fact of Nil rate of duty has no relevance for subject issue under consideration. 15. Therefore, keeping in view above position, it is concluded that the findings of Ld. Adjudicating Authorities do not reflect the correct applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such service provided by M/s. Plus Tech Fabricators by following directions of M/s. L & T . Thus, the decision given by The Hon'ble Tribunal (Delhi)' in the case of MarutiUdyog Limited Versus Collector of Central Excise, New Delhi [2001(134)E.L.T. 188(Tri.-Del.)] holding the fabricators as service provider and not the manufacturer is squarely applicable to present case under appeal, and accordingly M/s. Plus Tech Fabricators are not manufacturer but are service provider, and the processes undertaken by them did not amount to manufacture." From the above ground of appeal, it appears that the contention of the Revenue is that even though the same activity though amounts to manufacture but since M/s L&T is the manufacturer, the appellant is a service provider for the same activity. We find that as per the exclusion provided in the definition of Business Auxiliary Service, the activity is not a person specific but the activity specific, therefore, if the activities of welding, fabrication, cutting, binding and other related activities amount to manufacture even if M/s L&T is a manufacturer but the activities per se is manufacturing activity irrespective of the ownership of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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