2026-VIL-1144-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Activity of conversion of raw materials into semi-finished - Manufacturing activity on job work basis, Applicability of service tax under Business Auxiliary Service - The appellant converts raw materials into semi-finished automotive springs based on drawings and specifications provided by the principal manufacturer, utilizing its own land, machinery, and manpower. The goods are cleared to the principal manufacturer without payment of excise duty - Whether the activity undertaken by the appellant on job work basis constitutes manufacture of excisable goods or rendering of BAS, and whether the appellant is liable to reverse cenvat credit under Rule 6(3)(i) read with Rule 14 of Cenvat Credit Rules, 2004 – HELD - The activity undertaken by the appellant amounts to manufacture of excisable goods and does not fall within the purview of BAS. The conversion of raw materials into semi-finished springs results in a new product with its own distinct name, purpose, and use. The processes undertaken are incidental and ancillary to the completion of the manufactured product, which is deemed to be manufacture under the inclusion clause of section 2(f) of the Central Excise Act, 1944. Since the activity constitutes manufacture of excisable goods, it cannot be brought under the purview of service tax under the category of BAS - The exemption under Notification No. 08/2005-ST applies only when the activity qualifies as BAS, which is not the case here. Therefore, the basic ground of the show cause notice that the appellant was providing exempted service and hence Rule 6 was invokable does not sustain – The non-payment of excise duty on the said excisable goods is not the issue in the present appeal and apparently, appellant have not paid excise duty under the impression that in terms of Rule 4(5)(a) or for that matter Notification No. 214/86, such goods when cleared from the premises of the job worker to the principal manufacturer, no Central Excise duty is required to be paid. Therefore, despite not having followed the provisions of the Notification No.214/86 or any other similar notifications, in the given factual matrix, there was no need to pay any Central Excise duty at the time of clearance of goods from job worker to principal manufacturer - The impugned order is set aside and the appeal is allowed
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GSTAT Filing Near: Closing Resolutions...
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