By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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During the period prior to 01/09/2009, activity amounting to ‘manufacture’ not liable for service tax even if not liable under Central Excise Act but chargeable under Medicinal and Toilet Preparations Act or any other Act.
Facts:
The appellant was manufacturing medicines containing alcohol on job work basis. The said medicines were chargeable to duty under the Medicinal & Toilet Preparations (Excise Duty) Act, 1955. The Department claimed that the exemption from business auxiliary services to job worker is restricted only to excisable goods under section 2(f) of the Central Excise Act, 1944 and since the goods are not excisable under the said section, exemption cannot be granted to appellant.
Held:
The exclusion is applicable to activity of ‘manufacture’ under section 2(f) of the Central Excise Act, 1944 and not restricted to “excisable goods” under the said section. Considering this exemption is available to the activity which is regarded as manufacturing activity whether chargeable to Central Excise Act, 1944 or Medicinal & Toilet Preparations (Excise Duty) Act, 1955 or any other Act and the appeal was allowed.
Comment:
The definition of business auxiliary service has been amended with effect from 01/09/2009 whereby the term ‘manufacture’ relates only to excisable goods under the Central Excise Act. Therefore the above will not hold good for the period after 01/09/2009.
