Daljeet Singh Vs Commissioner of Central Excise And Service Tax (CESTAT Chandigarh)
In a recent decision, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chandigarh ruled on the case of M/s Daljeet Singh vs Commissioner of Central Excise and Service Tax. The crux of the matter was whether the process of electroplating carried out by the appellant constitutes manufacture under relevant tax laws.
M/s Daljeet Singh was engaged in electroplating filter components of motor vehicles on a job-work basis for various auto parts manufacturers. The dispute arose when the tax department sought to levy service tax on this activity under the category of “Business Auxiliary Service.” The department argued that electroplating did not amount to manufacture and thus was taxable.
The appellant countered, citing precedents and legal provisions that support electroplating being classified as manufacture. They referenced the decision in the case of Jindal Steel and the applicability of Section 2F of the Central Excise Act, 1944. They also highlighted Notification 8/2005-ST which covers goods received on a job-work basis.
In the case of Interplex Electronics India Pvt. Ltd. – 2013 (5) TMI 451-CESTAT Bangalore, the Tribunal affirmed that electroplating constitutes manufacturing. Citing its previous decision in Modison Metal Refiners and the Supreme Court ruling in TISCO vs. UOI, the Tribunal noted that electroplating is recognized as a manufacturing process. The Tribunal also highlighted that prior decisions cited by the Commissioner did not consider the relevant section note or classify the product under Chapter 85. Consequently, the Tribunal ruled that electroplating by the appellant qualifies as manufacturing, thereby exempting them from service tax under the business auxiliary service definition.
