Order Date – 01 March 2023

Parties: Ramaben Parmar Vs C.S.T.-Service Tax – Ahmedabad

Facts –

• The Appellant, Ramaben Parmar, have carried out the job work on the casting supplied by the principal manufacturer for machining and other process to make the parts for use in the manufacture of final product of the principal manufacturer. The appellant also rented their premises.
• The revenue has demanded service tax on the job work under the category of Business Auxiliary Service and service tax on renting of Immovable property.

Issue –

• Whether the appellant is liable to pay service tax on job work and renting immovable property?

Order –

• The Tribunal held that the process is clearly manufacturing as it is clear that the casting which falls under Chapter 73 and after machining the parts falls under different heading of the machine parts. 
• The Business Auxiliary Service clearly excludes the activity which amounts to manufacture in terms of Section 2(f) of Central Excise Act, 1944 therefore, the appellant’s activity of job work i.e. machining of casting amounts to manufacture hence, the same is out of the purview of Business Auxiliary Service hence cannot be taxed under the said category.
• Since the alleged Business Auxiliary Service has clearly gone out of the service, the value of the same cannot be taken for calculating the threshold limit of notification no. 6/2005-ST for the purpose of charging service tax on renting of immovable property, accordingly, after exclusion of the job work value, net amount of renting of immovable property is below the threshold limit under notification no. 6/2005-ST. Hence, no service tax is payable.
• The appeal is allowed.