Custom, Excise & Service Tax Tribunal
Trident Coatings Pvt Ltd vs Chennai-Iii on 7 January, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. III
Service Tax Appeal No. 40427 of 2015
(Arising out of Order-in-Appeal No.151/2014 (M-III) dated 07.07.2024
passed by Commissioner of Central Excise & Service Tax (Appeals),
No.26/1, Mahatma Gandhi Marg, Nungambakkam, Chennai 600 034)
M/s.Trident Coatings Pvt. Ltd. .... Appellant
1/590, GST Road, Vandalur,
Chennai 600 048.
VERSUS
The Commissioner of GST &
Central Excise ... Respondent
Chennai North Commissionerate, 26/1, Mahatma Gandhi Road, Nungambakkam, Chennai 600 027 APPEARANCE :
Ms. Swetha R.S., Advocate for the Appellant Shri Anoop Singh, Authorized Representative for the Respondent CORAM :
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL) HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) FINAL ORDER No.40030/2025 DATE OF HEARING : 14.11.2024 DATE OF DECISION : 07.01.2025 2 Service Tax Appeal No. 40427 of 2015 Per: Shri P. Dinesha In the present appeal, the Assessee/Appellant is questioning the denial of exemption benefit and demanding the consequential service tax.
2. Heard Ms. Swetha R.S., Ld. Advocate for the Appellant and Shri Anoop Singh, Ld. Joint Commissioner for the Revenue, we have heard the rival contentions and perused the documents placed on record and also judicial pronouncements relied upon during the course of arguments before us. We find that the only issue to be decided by is, "Whether the demand of service tax is justifiable ?"
3. In the Order-in-Original No 63/2012 dated 16.10.2012 the Adjudicating Authority holds the view that the activity undertaken by the Appellant, of powder coating of metals and articles of metals did not amount to 'manufacture' in terms of Section 2(f) of Central Excise Act, 1944. He has accordingly held that the above activity was rightly classifiable under 'Business Auxiliary Service' (BAS); service tax exemption claimed under Notification No.8/2005-ST dt. 01.03.2005 was accordingly denied since, according to the Adjudicating Authority, the activity of the appellant did not amount to 'manufacture' in terms of Section 2(f) ibid.
4. From the records placed before us, we find that Appellant has inter alia furnished before the Adjudicating Authority permissions letters to send the materials for job work since, admittedly, the principals were SEZ units. Strangely, however, the Adjudicating Authority has not at all given due consideration to the said permission letters 3 Service Tax Appeal No. 40427 of 2015 granted by the Authorized Officer for outsourcing the job work by the SEZ units to the Appellant herein. The said letters are clear in as much as, they indicate the purpose and also identify the entities to whom the job work was outsourced.
5. On perusal of Notification No.8/2005 (supra) makes it clear that the goods received on job work should be used in the manufacture of goods on which appropriate duty is payable. The appellant has claimed that it had performed the job work as instructed by the SEZ units; the SEZ units did not dispute the job work executed by the Appellant for which both the parties did not dispute the payment / consideration and it is nowhere even disputed by the authorities below that the principals / SEZ units had used the said components that underwent the process of job work in the manufacture of final products which attract appropriate duty. From the pleadings taken out by the appellant even before the Original Authority, the appellant had only claimed the benefit of Notification No.8/2005 (supra) but, strangely the Adjudicating Authority has examined the above claim of the Appellant in the context of Notification No.4/2004-ST dt. 31.3.2004 and thereby denied the benefit of the said Notification No.4/2004. In the impugned order, the Commissioner (Appeals) has gone a step ahead to the extent of even disbelieving the physical delivery of goods to the place of SEZ units. That may be a doubt which is clearly out of context since, when the appellant had claimed to have delivered and the principals / SEZ units having not disputed the receipt of the same and that there has also been flow of consideration that too in cheque, that itself shows that the 4 Service Tax Appeal No. 40427 of 2015 delivery is complete. But in any case, this aspect having been accepted by the Adjudicating Authority without any doubt and when there was no appeal by the Revenue, the impugned order to this extent is clearly arbitrary, uncalled for and beyond the appellate proceedings and it is also are in violation of the well settled principles of natural justice.
6. We therefore hold that the job worker / Appellant is entitled to the benefit of exemption Notification No.8/2005 (supra) and that the activity of the Appellant was not taxable under BAS. In this regard, we find that our view stands supported by the decisions / orders of various higher judicial fora relied upon by the appellant as under :
(i) Interplex Electronics India P. Ltd. Vs CST Bangalore -
2014 (33) STR 56 (Tri.-Bang.)
(ii) CCE Vs CEGAT Madras - 2016 (344) ELT 133 (Mad.)
(iii) CCE Chandigarh Vs Alpha Drugs (India) Ltd. - 2002 (140) ELT 43 (P&H)
(iv) Best Heat Treatment Services Vs CGST & Central Excise, Coimbatore [Final Order No.40409/2019 dated 27.02.2019 in Appeal No.ST/593/2012]
7. In the result, the impugned order which calls for interference is set aside and appeal stands allowed with consequential benefits, if any, as per law.
(Order pronounced in the open court on 07.01.2025 ) sd/- sd/-
(VASA SESHAGIRI RAO) (P. DINESHA) Member (Technical) Member (Judicial) gs