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TMI Blog2024 (3) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... hat M/s. Godrej Consumer Products Limited (in short 'GCPL') is engaged in the manufacturing and selling of mosquito repellant coils. On 19.04.2001, the first appellant entered into an agreement with Assam Power loom Development Corporation Ltd. to take their industrial shed on lease to manufacture coils for GCPL and the appellant No.2 on 29.09.2003 entered into an agreement with Assam Industrial Infrastructure Development Corporation to take their industrial shed on lease to manufacture coils for M/s. Godrej Sara Lee Limited (in short 'GSLL'). On the basis of these agreements both the appellants were provided infrastructure, raw materials, technical knowhow, trade mark, production plan for GCPL/GSLL and GCPL/GSLL was also having quality con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal No.115/Addl.Commr./ST/GHY/2022- 23 dated 18.11.2022. Therefore, the appellants are not liable to Service Tax. 4. He further submitted that if it is held that the activity undertaken by the appellants amounts to manufacture, therefore no Service Tax is payable by them as held by this Tribunal in the case of SRD Nutrients Pvt.Ltd. v. Commr. of CGST & CX, Guwahati [2023-VIL-1200-CESTATKOL- ST]. 5. It is further submitted that in the Positive List Regime once the activity falls under manufacture which has been excluded from the ambit of 'Business Auxiliary Service', it would not automatically fall under 'Business Support Service' in the Negative List Regime. It is the submission of the Ld.Counsel that in the Positive List Regime, the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the GCPL/GSLL the charges of their activity in terms of per piece basis. For better appreciation of the facts, an invoice issued by the appellant No.1 on GCPL is extracted below:- 9. On going through the invoice issued by the appellant No.1, the appellant is charging price for goods manufactured by them in terms of quantity of goods manufactured. Moreover, labour has been employed by the appellant and by using their factory and manufactured the goods. These facts have not been examined by the Revenue, moreover, the demands sought to be raised only on the basis of the agreement entered by the appellants with GCPL/GSLL. Further, on the same activity in appellant's own case for the earlier period, the adjudicating authority itself, has exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ality standards and specifications of Godrej Sara Lee. The agreement also details the obligations and rights of both the parties to the agreement which hare not detailed here for the sake of brevity. One of such obligations on the part of Godrej Sara Lee is to provide the service provider uninterrupted supply of raw material for ensuring satisfactory production performance by the unit and market and distribute the products. It is also provided that the day today management of the plant is to be looked after by the service provider by way of ensuring uninterrupted supply of man power and other things as are necessary to effectively carry out manufacturing operations. The details of the obligations on both sides appear to create a case where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicates that the principal activity for which charges are paid is conversion of goods out of the raw materials supplied by and in the category of principal manufacturer. The notice issued by the department has also stated that the service provider is engaged in manufacturing, processing and packaging of goods, but has distinguished and concluded the said activities to be merely extension of "support services" to assist Godrej Sara Lee to undertake manufacture of goods. However, I find that the notice has noticeably failed to distinguish and clarify the particular activity under-taken by Godrej Sara Lee which amounted to 'manufacture' of goods when it is simultaneously acknowledged in the notice that the service provider is infact, undertaki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess of manufacture in the instant case is undertaken by the supporting manufacturer for Godrej Sara Lee and that, the activity undertaken by them amounted to manufacture as defined in Section 2(f) of the Central Excise Act, 1944 and the goods being chargeable to excise duty, and duty being discharged by the principal manufacturer, as per law, the said activity cannot be considered to be a taxable service under the category of "business auxiliary service" and accordingly is not liable to service tax. Therefore, I find that the charges made in the notice are not sustainable and the demand made therein is not enforceable." and dropped the proceedings. 10. Further, in appellant's own case for another period, again the issue was examined a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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