JUBILANT INDUSTRIES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellant is successor in interest of a company by name Pace Marketing Specialties Ltd. ("PMSL" for short). The matter in dispute in this appeal is about liability to service tax on certain activities carried out by PMSL during the period April 2007 to Nov. 2010. There were two Show Cause Notices which had been adjudicated by the impugned order. SCN dated 28 -10 -2010 related to the period April 2007 to March 2010 and SCN dated 18 -3 -2011 related to April 2010 to 14 -11 -2011. Demand for service tax amounting to Rs. 1,31,93,416/ - on account of first SCN and Rs. 29,02,873/ - on account of second SCN are confirmed along with interest and penalties. After filing the appeal before the Tribunal, the appellant filed a petition for withdrawing the appeal in respect of the normal period of limitation, that is 1 -10 -2009 to 14 -11 -2010, involving service tax demand of Rs. 49,18,625/ - and wanted to contest only the demand beyond the normal period of limitation. Initially the Tribunal refused permission for such partial withdrawal vide Misc. Order No. ST/M/244/2012 -Cus., dated 13 -6 -2012. The appellant filed a writ petition before the Hon'ble Allahabad High Court vide Writ Tax Number 973 of 2012. The High Court vide order dated 14 -8 -2012 set aside the said order and ordered that Tribunal should take note of Section 86(4) of Finance Act, 1994 and pass appropriate order on merits.

(2.) THE Appellant entered into an agreement with Jubilant Life Sciences Ltd. ("JLSL" for short) under which they agreed to manufacture excisable goods from raw materials to be supplied by them. The terms of the agreement entered into between JLSL and the appellant clearly show that the appellant was processing goods for JLSL and the manufacturing activity was entirety carried out by the appellant in the presence of the managerial staff of JLSL. All the materials required for carrying out the processing activity were supplied by JLSL. The products once processed were either supplied to JLSL's depot or directly to the customers of JLSL on payment of excise duty.

(3.) SINCE their entire factory was to be used for manufacturing activity using raw materials supplied by JLSL and JLSL was willing to clear the goods on payment of excise duty from the appellants factory, the appellants consulted the Excise department as to who should be registered for discharging excise duty liability. With the advice and consent of the department officials the Excise registration in the name of JSPL was surrendered and new registration taken in the - name of JLSL and they were paying excise duty on goods manufactured and cleared from the appellants' factory.