MISTAIR HEALTH & HYGIENE PVT. LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, PUNE-II
LAWS(CE)-2015-6-21
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on June 30,2015

Mistair Health And Hygiene Pvt. Ltd. Appellant
VERSUS
Commissioner Of Central Excise, Pune -Ii Respondents




JUDGEMENT

M.V.RAVINDRAN,MEMBER (J) - (1.)THIS appeal is directed against Order -in -Appeal No. PII/PAP/190/2009 dt. 11.9.2009 vide which the adjudicating authority has upheld the order in original holding that appellant is liable to pay the service tax, interest thereof and penalties.
The brief facts involved in the appeal are that the appellant, who is a holder of Central Excise Registration was engaged in the manufacture of pharmaceutical products falling under Chapter heading No. 30 of the CETA, 1985; that the appellant entered into an agreement dated 1.11.2005 with M/s. Bayers Pharmaceuticals Private Ltd., Mumbai for manufacture of the product called Bayer Tonic II on job work basis; that the product Bayer Tonic II was an alcoholic preparation which was not covered under the Central Excise Tariff Act and accordingly, the activity of manufacture of the said product for other persons attract service tax under the taxable category of Business Auxiliary Service (BAS in short); that since the Bayer Tonic II is non -excisable product, the activity does not amount to manufacture under the definition of manufacture given under Section 2(f) of the Central Excise Act, 1944; that on the above facts, a SCN dated 6.7.2007 was issued informing the appellant that the service rendered by him is rightly falling under BAS and accordingly, for the consideration of Rs. 41,97,892/ - received during the period from 31.7.2006 to 30.3.2007, the appellant is liable to pay the service tax under BAS and accordingly, the appellant was directed to show cause as to why the service tax of Rs. 5,13,822/ - should not be recovered under Section 73(1) of the Finance Act, 1994 (hereinafter referred as the Act), interest under Section 75 of the Act should not be recovered and penalty under Section 76 and 77 of the Act should not be imposed; that on adjudication, the demand raised in the SCN was confirmed along with interest, in addition to imposing penalty under Section 76 and 77 equal penalty under Section 78 of the Act.

(2.)AGGRIEVED by such an order appellant filed an appeal before the first appellate authority. After following the due process of law the first appellate authority rejected the contentions and upheld the demands with interest and penalties.
(3.)LEARNED advocate appearing on behalf of the appellant after taking us through the facts of the case and the records, would submit that the entire issue is whether medicaments containing alcohol would be not amounting to manufacture and hence liable for service tax under business auxiliary services. He would submit that the medicines manufactured by the appellants undoubtedly arise out of manufacturing process. He would submit that since the definition of business auxiliary services excludes any activity that the amounts to manufacture as per provisions of section 2(f) of Central Excise act, 1944, does not mean that medicines containing alcohol are not manufactured items. He would submit that the issue is now squarely settled by the judgment of Tribunal in the case of Rubicon formulations Pvt. Ltd., Vs. C.C., C.E. & S.T., Aurangabad : 2010 (19) S.T.R. 515 (Tri. - Mumbai) and Midas Care Pharmaceuticals Vs. Commr. of C. Ex. Aurangabad : 2010 (18) STR 768 (Tri -Mumbai). It is also his submission that the first appellate authority in the subsequent matters of the appellant has followed the law settled by the Tribunal and given them relief draws our attention to the said decisions.
Learned departmental representative would reiterate the findings of the lower authorities.

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