Walzen Steel India Ltd. v. Service Tax-ii, Kolkata
Case brief
What is this about?
The CESTAT Kolkata allowed the appeal of IFB Industries Limited, a manufacturer of cold rolled steel sheets, against a demand of service tax on job work performed for other manufacturers. The Tribunal held that the exemption under Notification No. 08/2005-S.T. applies where goods are produced using client-supplied raw materials and returned for use in manufacturing excisable goods on which appropriate excise duty is payable. The Tribunal interpreted 'payable' as imposing a liability to pay duty, not requiring proof of actual payment, and found that the use of job work challans by clients indicated they were duty-paying assessees.
What did the court decide?
The impugned order demanding service tax was set aside. The appeal was allowed and the appellant held eligible for the exemption under Notification No. 08/2005-S.T. and consequential relief as per law.