Table of Content
1. background of service tax demand on liquor bottling job work. (Para 1 , 2)
2. arguments regarding the definition of job work and manufacturing. (Para 3 , 4)
3. determination that bottling activities are integral to manufacture. (Para 5)
4. final ruling on tax demand and late fees. (Para 6)

K. ANPAZHAKAN:

The present appeal has been filed by M/s A to Z Security Company And Other Services (herein after referred as the Appellant) against the Order-in-Appeal No. 247/ST/Alld/2021 dated 23.08.2021, whereby the Ld. Commissioner (Appeals) confirmed the demand of Service Tax amounting to Rs. 49,70,835/- under Section 73 of the Finance Act, 1994 for the period from October 2013 to March 2015 by invoking the extended period of limitation, along with applicable interest under Section 75 and penalty of Rs. 24,85,418/- under Section 78 of the Finance Act, 1994. Late fee of Rs. 38,300/- (for the periods October 2013 to March 2014 and April 2015 to September 2015) and interest of Rs. 154/- pertaining to FY 2016-17.

2. The facts of the case are that the Appellant is engaged in undertaking job work for M/s Wave Distilleries & Breweries Ltd (M/s Wave) and other manufacturers of liquor. The activities undertaken by the Appellant majorly include repacking of old bottles, repackaging of glass bottles, barcode sticking, cleaning of bottles and other activities forming part of the manufacturing cycle of liquor.

2.1. During the period from October 2013 to March 2015, the Appellant, under a bona fide belief, claimed exemption from payment of Service Tax on the aforesaid activities under Serial No. 30(c) of Notification No. 25/2012-ST which exempts following services-

30. Carrying out an intermediate production process as job work in relation to -
(c) any goods on which appropriate duty is payable by the principal manufacturer’

Thereafter, pursuant to Notification No. 6/2015-ST dated 01.03.2015, whereby the said exemption stood withdrawn w.e.f. 01.04.2015, the Appellant accepted the changed legal position and duly discharged the applicable Service Tax on the said activities for the subsequent period. The Department alleged that the Appellant had wrongly claimed the benefit of the aforesaid exemption and that the activities were liable to Service Tax for the period prior to 01.04.2015 also.

2.2. The department expressed the view that the activities undertaken by the Appellant do not qualify for exemption as provided under Entry 30(c) of the said Notification No. 25/2012-ST, due to the following grounds:

a. Activities undertaken by the appellant cannot be regarded as processing of raw materials or semi-finished goods and, therefore, do not qualify for exemption under Entry 30(c) of the said Notification.

b. These activities are also not the processes resulting in the
- Manufacture or finishing of liquor
- Or any operation which is essential for aforesaid process

2.3. Accordingly, the impugned demand has been raised for the period from October 2013 to March 2015. On adjudication, the Ld. Adjudicating authority has confirmed the demands raised in the Notice along with interest and penalty. On appeal, the Ld. Commissioner (Appeals) has upheld the demands confirmed in the Order-in-Original. The Commissioner (Appeals) also upheld the late fee of Rs. 38,300/- (for the periods October 2013 to March 2014 and April 2015 to September 2015) and interest of Rs. 154/- pertaining to FY 2016-17. Aggrieved against the confirmation of the demands of service tax along with interest and penalty, the Appellant has filed this appeal.

3. The submissions made by the Appellant are summarized as under:

Activities of the appellant exempt by virtue of “Entry 30(c) of Mega Exemption Notification No. 25/2012- ST dated 20.06.2012.

i. It is to be submitted that the Appellant has carried out an intermediate production process as job work in relation to liquor manufactured by M/s Wave and other manufacturers on which app

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