No Service Tax Leviable on Activity Amounting to Manufacture of Goods Covered Under Central Excise Tariff Act: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the activity amounting to manufacturing of goods covered under the Central Excise and Tariff Act,1985. 

Neo Structo Construction Ltd, the appellant assessee was engaged in the Erection Commissioning and Installation Service, Management, Maintenance and Repair Service, Manpower Recruitment and Supply Agency Service and Goods Transport Agency Service. 

The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand for service tax on Erection Commissioning and Installation Services, Management, Maintenance and repair Services, Manpower Recruitment and supply Agency Services, and demand for reversal of CENVAT Credit availed by the assessee on these services obtained from the sub-contractors. 

Jigar Shah and Amber Kumrawat, the counsels for the assessee contended that the assessee carried out the activity amounting to manufacture, and the goods are covered under Chapter heading 7308 of the Central Excise Tariff Act. 

Also submitted that the activity undertaken by the assessee was a manufacturing activity and therefore, the assessee is not liable to pay service tax and assessee are not liable to pay service tax and are exempt from central excise duty still they are entitled to the CENVAT credit. 

Ashok Thanvi, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was liable to pay the service tax on the services rendered by him and the CENVAT Credit was not allowed to the assessee. 

The Bench observed that the assessee carried out the activities of manufacturing the goods which were covered under the Central Excise Tariff Act and not liable to Service Tax. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the demand for service tax imposed on Erection Commissioning and Installation Service, Management, Maintenance and Repair Service, Manpower Recruitment and Supply Agency Service and Goods Transport Agency Service while allowing the appeal filed by the assessee. 

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