2013 (8) TMI 856 - AT - Service Tax

Export of services - Technical Testing and Analysis Section 65(106) r.w. Section 65(zzh) - whether the service conducting clinical trials provided by the assessee are taxable service - assessee provided services to the foreign clients as export of service Held that - Assessee satisfied the conditions of Rule 3(2) and accordingly eligible for the exemption under Notification No. 11/2007-S.T. dated 1-3-2007 - when reports were delivered to the clients outside India it amounts to taxable service partly performed outside India - performance of testing and analysing has no value unless and until it is delivered to its client - service is to be complete when such report is delivered to its client - performance of the taxable service has no validity/sanctity unless its report is submitted to the service receiver/client - delivery of report to its client is an essential part of the service report was delivered outside India and same was used outside India relying on the decision of M/s. B.A. Research India Ltd. Versus CST Ahmedabad (2010 (5) TMI 89 - CESTAT, AHMEDABAD) appeal decided against the revenue.

Summary

Issues Involved:
- Whether services provided by the appellants for conducting clinical trials to foreign clients can be considered as export of service under the relevant provisions of the Finance Act, 1994.

Detailed Analysis:

Issue 1: Services as Export of Service
- The appellants conducted clinical trials for clients in India and outside, falling under Technical Testing and Analysis services as per the Finance Act, 1994.
- A Show Cause Notice was issued as Service Tax was not paid on the amount received against export of service to clients outside India.
- The adjudicating authority confirmed the demand, imposed interest, and penalty under relevant sections of the Act.
- The first appellate authority, after waiving the pre-deposit condition, set aside the Order-in-Original, holding it incorrect, and allowed the appeal.
- The Revenue appealed, arguing that an identical issue was decided in a previous case by the same Bench.
- The Bench referred to the previous judgment and analyzed the issue of whether conducting clinical trials constituted taxable service under technical testing and analysis.
- The Bench examined the Export of Services Rules, 2005, determining that the service performance was not complete until the testing and analysis report was delivered to the client outside India.
- Delivery of the report outside India and its use there satisfied the conditions for export of service, making the service not taxable.
- The Bench upheld the impugned order, rejecting the Revenue's appeal and disposing of the Stay petition accordingly.
- The judgment concluded that the issue was settled in favor of the assessee based on the analysis of the service delivery and usage outside India.
- The impugned order was deemed correct and without any infirmity, leading to the rejection of the Revenue's appeal.

This detailed analysis of the judgment highlights the key legal arguments, interpretations of relevant provisions, and the final decision regarding the taxability of services provided by the appellants for conducting clinical trials to foreign clients.