Process of grinding of wheat into wheat products is not liable to Service Tax
Recently in the case of M/s Jayakrishna Flour Mills (P) Ltd. Versus CCE, Madurai, 2014 (12) TMI 547 Honorable CESTAT Chennai held that the process of grinding of wheat into wheat products such as maida, atta, suji and bran would amount to manufacture and accordingly is outside the ambit of Service Tax,
In the instant case, the appellant is engaged in the activity of grinding of wheat into wheat products and was of the view that the same would come under the definition of ‘manufacture’ under Section 2(f) of Central Excise Act, 1944 and hence not chargeable to Service Tax. On the other hand, as per CCE Madurai the activity falls under ‘Business Auxiliary Service’. Earlier, CCE Coimbatore has brought the issue with the CBEC and the CBEC vide their letter F. No. 11/02/2012-CX.1 dated 18.7.2013 had confirmed the view that the process of grinding wheat into wheat product would amount to manufacture and no service tax is levied therefore in the instant case relying upon the Board Circular Honorable CESTAT Chennai has set aside the order.