1. These appeals were taken up for hearing on the point of stay. The appellants have filed application for waiver of the requirement of pre-deposit. It is submitted that the issue involved in these appeals is whether the activities carried on by the appellants are covered by the manufacturing process so as to stay out of the ambit of the service tax. Learned Counsel has placed strong reliance on a judgment of the Madhya Pradesh High Court in the case of Som Distilleries Pvt. Ltd., reported in 1997 (2) MPLJ 376.
2. On behalf of the Revenue, on the other hand, it was submitted that the activity involved in the case of M/s Som Distilleries Pvt. Limited was bottling of country liquor whereas in the instant case, the appellants are also engaged in packaging and labelling activities and, therefore, that part of the activity is covered by the definition of 'taxable service' in the Finance Act, 1994. In support of the contention, reliance is placed on the another decision of the Madhya Pradesh High Court itself in the case of Vindhyachal Distilleries Pvt.
Ltd., reported in 2006 (3) STR 723 (M.P.). At this stage, we do not want to go into the question as to whether the case of the appellant is covered by the decisions in M/s Som Distilleries Pvt. Limited or M/s Vindhyachal Distilleries Pvt. Limited. There is an apparent conflict of opinion in the two cases. As a matter of fact, the Madhya Pradesh High Court has referred the issue to larger Bench in the case of M/s Great Galleon Limited in writ Appeal No. 1524 of 2007. Indeed, the case of the appellant M/s Som Distilleries Pvt. Limited has been tagged with the appeal of M/s Great Galleon Limited vide order dated 21.01.2008.
The question framed in the order of reference is whether bottling of liquor amounts to manufacture of liquor or only packaging so as to attract the service tax.
3. Learned Departmental Representative for the Revenue submitted that the activities carried on by the appellant can be dissected in a manner that both excise duty as well as service tax are paid. Theoretically, the submission is well founded but the issue is highly debatable and, therefore, we are of the view that the benefit should go in favour of the appellants and the requirement of pre-deposit, therefore, should be dispensed with.
4. We accordingly direct full waiver of the pre-deposit of duty and penalty. Stay petition is accordingly allowed. The party is at liberty to mention this appeal for early listing after the case of M/s Great Galleon Limited is decided by the Madhya Pradesh High Court.