2026-VIL-1059-CESTAT-KOL-ST
  1. Home
  2. 2026-VIL-1059-CESTAT-KOL-ST

SERVICE TAX CESTAT Cases

Service Tax – Taxability of manufacturing activity undertaken for principal manufacturer on piece rate basis - Agreement with a principal manufacturer to undertake manufacturing activities including packing, repacking, labelling, loading and unloading of goods on a piece rate basis. The principal manufacturer provided raw materials, technical knowhow, plant and machinery, while the service provider employed its own labour and charged consideration based on per piece basis and goods manufactured were cleared on payment of excise duty by the principal manufacturer - Whether the manufacturing activity undertaken by the appellant for the principal manufacturer amounts to manufacture or constitutes a taxable service under the Finance Act, 1994, thereby attracting service tax demand – HELD - The activity undertaken by the appellant amounts to manufacture and does not constitute a taxable service. The activity of converting raw materials into finished goods on behalf of the principal manufacturer, for which consideration is charged on a per unit or per piece basis rather than on value of service rendered, indicates a principal-supporting manufacturer relationship. The charges are measured in terms of conversion rates for units of finished goods manufactured, which reinforces that the principal activity is conversion of goods - The relationship is not that of a service provider but of a supporting manufacturer undertaking actual manufacture on account of and as per requirements of the principal manufacturer. Since the goods have suffered excise duty at the end of the principal manufacturer, the activity cannot be considered as a taxable service under business auxiliary services. Even if production of goods on behalf of a client is made a taxable service, it would not be covered under service tax if the production activity undertaken falls within the meaning of manufacture under the Central Excise Act - The demand of service tax along with interest and penalty is set aside and the appeal is allowed
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GSTAT Outreaches, Filing Intricacies...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?