TMI Blog2024 (3) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... n of facts etc and service tax has been demanded under the categories Business Auxiliary Service, Manpower Recruitment or Supply Agency Service and Maintenance or Repair Service. The Adjudicating Authority has decided both the show cause notices on the same date i.e. 28.12.2012 and has confirmed the demand of service tax for the for the same set of activities undertaken by the appellant under two categories of services namely Maintenance or Repair Service and in the second order-in-original under Business Auxiliary Service, Manpower Recruitment or Supply Agency Service, and Maintenance or Repair Service - the confirmation of demand of service tax for the same activity i.e. manufacturing of Heavy Water of nuclear grade for Department of Atomic Energy under the different categories by the Adjudicating Authority clearly indicates no application of judicious mind and demand has been confirmed in a perfunctory manner without any cogent reasons. The definition of term manufacture as provided under Section 2(f) of Central Excise Act, 1944 is an inclusive definition which says that activity of manufacture and resulted into a new and identifiable product having distinct name, chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r). For manufacturing of ammonia, the appellant procure NGL/ARN from ONGC, Hazira, Surat and Natural Gas from GAIL. During the course of manufacturing of ammonia, a feed synthesis gas that is mixture of Nitrogen and Hydrogen in the ratio of 1:3 gets produced as intermediary product. The feed synthesis gas contains traces of deuterium. For manufacturing of ammonia, deuterium is required to be detached from feed synthesis gas. 1.2 The deuterium after getting detached from feed synthesis gas is used as basic raw material for manufacture of Nuclear Grade Heavy Water which is used as moderator‟ and coolant‟ in the Nuclear Power Station as well as at research reactor by the department of Atomic Research, Government of India. Heavy water (D2 O) is the oxide of deuterium, an isotope of hydrogen where as ordinary water (H2 O) is an oxide of Hydrogen. 1.3 It is a matter of record that department of Atomic Research Centre established Heavy Water Plant named as Hazira Ammonia Extension Plant (HAEP for short) owned by Government of India near to the ammonia plant of appellant. On 18.12.1999, the appellant entered into an operation and maintenance agreement with the Heavy Wat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penal provisions have also been invoked in the show cause notice. The above mentioned show cause notices have been adjudicated by the learned Commissioner vide orders-in-original 10/Service Tax/2012 dated 28.12.2012 for the show cause notice dated 01.05.2009 and order-in-original No. 11/Service Tax/2012 dated 28.12.2012 for the show cause notice dated 16.06.2005 wherein all the allegations have been confirmed by the Adjudicating Authority. The appellant is before us against the above mentioned orders-in-original. 2. Shri Jigar Shah, Learned Counsel appearing along with Shri Amber Kumarawat submitted that in the first show cause notice dated 16.06.2005 whereunder demand has been made for the period July 2003 to March 2004 the department in this show cause notice dated 16.06.2005 had proposed to demand of service tax for the entire gross amount received by the appellant under the head Maintenance or Repair Service . For the same activity, the second show cause notice has demanded service tax under the categories of Business Auxiliary Service, Manpower Recruitment or Supply Agency Service and Maintenance or Repair Service. As per the break-ups of consideration given in the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut substantiating this view. The learned advocate has further submitted that appellant is manufacturing Heavy Water which is a new commodity with different name, character and use and comes into existence when the appellant operates the Heavy Water plant. Thus the activity undertaken by the appellant clearly amounts to manufacturing of excisable goods. 2.4 It has further been submitted that the consideration which was received by the appellant from the Heavy Water Board, Department of Atomic Energy was for operating Heavy Water plant and production of Heavy Water which is their main activity. The other activities carried out by the appellant are incidental to the main activity and undertaken for smooth functioning of the Heavy Water plant. It has been brought to our notice that learned Commissioner has heavily relied upon the fact that appellant has paid service tax under taxable head of Business Auxiliary Service‟ after 16.06.2005. It has been argued that merely because the appellant has paid service tax, it is not meant that they have accepted the liability to pay service tax. It has also been brought to our notice that service tax paid by the appellant was paid under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d show cause notice dated 01.05.2009 covering the period April 2004 to November 2006 as the second show cause notice has been issued on the same set of facts which were already in the show cause notice dated 16.06.2005 and therefore, second show cause notice dated 01.05.2009 is clearly time-barred. In this regard, learned advocate has relied upon the following judgments:- (a) Nizam Sugar Factory vs. CCE 2006 (197) ELT 465 (SC) (b) CCE vs. Escort Limited 2009 (235) ELT 55 (P H) (c) Geotech Foundation Construction 2008 (224) ELT 177 (SC) 3. We have heard Shri Tara Prakash, learned Deputy Commissioner (DR) who has reiterated the findings given in the orders-in-original. 4. Having heard both the sides in detail, we find that two show cause notices, first dated 16.06.2005 and second dated 01.05.2009 have been issued on the same facts of the matter. However, in the first show cause notice, service tax has been demanded under the category of Maintenance or Repair Service while in the second show cause notice the demand has been made invoking extended time proviso alleging suppression of facts etc and service tax has been demanded under the categories Busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finition of excisable goods and says that excisable goods are one which is specified in the first and second schedules of the Central Excise Tariff Act, 1985. We are of the opinion, that appellant is engaged in operation of Heavy Water plant and manufacture of Heavy Water from feed synthesis gas and generation of deuterium. As per the manufacturing process of Heavy Water, feed synthesis gas generated in the ammonia plant of the appellant is transferred to Heavy Water plant where deuterium is extracted from the feed synthesis gas. Such extracted deuterium is further processed in the Heavy Water plant with facilities and generating a distinct product i.e. Heavy Water . Thus, we take note of the fact that process of converting deuterium into Heavy Water is nothing but manufacturing of Heavy Water as defined under Section 2(f) of Central Excise Act, 1944. We are also of the opinion that merely because Heavy Water falling under Chapter 28.45 of the Central Excise Tariff Act, 1985 attracts nil rate of duty will not make it non-excisable goods. While coming to this conclusion we take shelter of the Hon ble Supreme Court decision in the case of Nandi Printers Pvt. Limited vs. GoI 2001 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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