2026-VIL-764-CESTAT-HYD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Manufacturing activity under Job Work or Renting of immovable property services – Appellant entered into an agreement with Aurobindo Pharma Ltd (APL) to manufacture their products in the its manufacturing facility on job work basis - Department felt that the activity would be covered under 'Renting of Immovable Property Services' (RIPS) under section 65(105)(zzzz) of the Finance Act, 1994 - Whether the activity undertaken by the appellant is a manufacturing activity and therefore not leviable to service tax, or is it a case of renting of immovable property services - HELD - The activity undertaken by the appellant amounts to manufacturing and is not covered under RIPS. There was a clear job work agreement between the parties, where the appellant was undertaking conversion work for manufacturing specified goods as per the standards and specifications of APL. The definition of 'Business Auxiliary Service' under section 65(19) excludes any activity that amounts to 'manufacture' within the meaning of clause (f) of section 2 of the Central Excise Act, 1944 - The mode and method of payment of conversion charges is not determinative of the fact that it was in the nature of rent, as the agreement provided that in case the actual conversion charges incurred by the appellant exceeds the agreed amount, APL will be liable to pay the excess amount. The reimbursable expenses paid by APL to the appellant cannot be subjected to service tax - The impugned order is set aside and the appeal is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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