9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (8) TMI 1333 - AT - Service TaxClassification of service - appellant had performed service in India and delivered clinical study report to their foreign client through E-mail, Courier or website - case of the department is that since the performance of service is in India and the clinical study was carried out on the goods supplied by the service recipient, therefore, the service of the appellant does not fall under the category of Export of Service in terms of Rule 4 of Place of Provision of Service Rules, 2012 - HELD THAT - The appellant have carried out the clinical study on the drugs supplied by the foreign based service recipient. After carrying out the clinical study on the goods supplied by the service recipient the technical report thereof was supplied to the service recipient. The service recipient is located outside India. On the identical facts and the activity involved in the present case, various judgments have been passed - reliance can be placed in COMMISSIONER OF CENTRAL EXCISE PUNE-I VERSUS SAI LIFE SCIENCES LTD. 2016 (2) TMI 724 - CESTAT MUMBAI where it was held that ' it can be safely said that the Research Development Service performed by the Appellant is export of service in terms of Rule 3 of Rules, 2012. Earlier also for the period July, 2012 to September, 2012, October, 2012 to December, 2012 and January, 2013 to March 2013, the said services were treated as export of services by the department and no relevant material has been placed on record to treat the same differently for the period in dispute. Therefore the Scientific and Technical Consultancy Services provided by the Appellant to DITC is to be treated as export of service.' In the case of M/S FERTIN PHARMA RESEARCH DEVELOPMENT INDIA PVT. LTD. VERSUS COMMISSIONER OF CGST, NAVI MUMBAI 2018 (10) TMI 1373 - CESTAT MUMBAI the tribunal observed ' the appellants are eligible to cash refund of the accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004, except in relation to credit availed input services denied by the Learned Commissioner (Appeals) observing that necessary evidences in relation to Building maintenance charges were not produced to establish the nexus with the output service and secondly the rent-a-cab service since placed under the exclusion clause of the definition of input service after amendment to Rule 2(l) of the Cenvat Credit Rules, 2004 with effect from 1-4-2011.' Thus, the activity of clinical trial on the drugs supplied by the foreign service recipient to the appellant amounts to export of service, hence, same is not liable to service tax - the impugned order is set aside - appeal allowed.
Issues Involved:
1. Classification of services provided by the appellant as "Export of Service" under Rule 4 of the Place of Provision of Service Rules, 2012. 2. Liability to pay service tax on the amount received for services provided. 3. Applicability of interest and penalties under various sections of the Finance Act, 1994. Issue-Wise Detailed Analysis: 1. Classification of Services as "Export of Service": The appellant performed clinical studies on drugs supplied by a foreign client and delivered the clinical study report electronically. The department argued that since the service was performed in India, it did not qualify as "Export of Service" under Rule 4 of the Place of Provision of Service Rules, 2012. The appellant contended that their service involved analyzing the effect of drugs, not merely testing them, and the goods (drugs) were not significant in this context. The appellant cited several judgments where similar services were classified as export of services, arguing that the issue was no longer res-integra. Relevant Judgments: - Commissioner Of Central Excise, Pune-I Vs. Sai Life Sciences Ltd: The Tribunal held that services provided to clients outside India, even when performed in India, could be classified as export of services if the service's benefit accrued outside India. - Dow Chemical International (P) Ltd. Vs. Commr. Of CGST, Navi Mumbai: The Tribunal ruled that research and development services fall under Rule 3 of the Place of Provision of Service Rules, thus qualifying as export of services. - Fertin Pharma Research & Development India Pvt. Ltd. Vs. Commissioner Of CGST, Navi Mumbai: The Tribunal reiterated that services performed in India but delivered to clients outside India are considered export of services. - Principal Commissioner Of C. Ex., Pune-I Vs. Advinus Therapeutics Ltd: The Tribunal emphasized that services are taxable at the destination where the benefit accrues, supporting the classification as export of services. - Apotex Research Pvt. Ltd Vs. Commissioner Of C. Ex. & S.T., Bangalore-I: The Tribunal upheld that clinical trials and the subsequent reporting to foreign clients constitute export of services. - Commissioner of Central Tax, Bangalore vs. Medgenome Labs Ltd: The Karnataka High Court confirmed that services provided to foreign clients, even if performed in India, are export of services. - Ayana Pharma Limited vs. Union of India: The Gujarat High Court highlighted that manual filing of refund claims is permissible and that services provided to foreign clients qualify as export of services. 2. Liability to Pay Service Tax: The Adjudicating Authority demanded service tax on the amount received for the services provided, asserting that the services did not qualify as export. The appellant argued that their services were indeed export of services and thus not liable for service tax. Relevant Judgments: - The consistent view across various tribunal benches and high courts, as cited above, supports the appellant's position that the services qualify as export of services, thereby exempting them from service tax. 3. Applicability of Interest and Penalties: The Adjudicating Authority imposed interest under Section 75 and penalties under Sections 76 and 77(2) of the Finance Act, 1994. The appellant contested these penalties, arguing that their services were correctly classified as export of services and should not attract service tax, interest, or penalties. Relevant Judgments: - The judgments cited by the appellant consistently ruled in favor of classifying similar services as export of services, thereby negating the applicability of service tax, interest, and penalties. Conclusion: The Tribunal, after considering the submissions and relevant judgments, concluded that the appellant's services qualify as export of services. Therefore, the services are not liable to service tax. Consequently, the demand for service tax, interest, and penalties was set aside. The appeal was allowed with consequential relief. The Tribunal's decision aligns with the consistent judicial stance that services provided to foreign clients, even when performed in India, are classified as export of services and are exempt from service tax.
|
