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TMI Blog2014 (5) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 - MR. M.R. SHAH AND MR. R.P.DHOLARIA, JJ. FOR THE APPELLANT : MR YN RAVANI, ADVOCATE FOR THE RESPONDENT :MR MIHIR JOSHI SR.ADV.WITH MR DHAVAL SHAH, ADVOCATE JUDGEMENT Per: M R Shah: 1.00. Present appeal has been preferred by the appellant- Commissioner of Service Tax, feeling aggrieved and dissatisfied with the judgement and order dtd. 3/9/2012 passed by the learned Customs, Excise Service Tax Appellate Tribunal (hereinafter referred to as CESTAT ) in Appeal No.ST/475/2011, by which, the learned CESTAT has allowed the said appeal preferred by the respondent by quashing and setting aside the orders passed by both the authorities below and holding that the respondent shall be entitled to refund as claimed, with the following proposed substantial question of law :- Whether the Hon ble CESTAT, WZB, Ahmedabad is right in holding that the services in dispute were used in the authorized operations by a unit situated in SEZ, even though the authorized operations as mentioned in the Letter of Approval of Development Commissioner, KASEZ meant manufacturing and in its letter dated 2/7/2010 Dy.Collector, KASEZ had asked the said assessee to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants were silent about this aspect in their reply. Further it was noticed that said approved list was addressed to the appellants but at different addresses. The appellants in their reply were silent about this aspect and not clarified the said observation. (d) The appellants had not produced copy of their letter applying for extension of period and it appeared that the appellants had not commenced authorized operation of manufacture and as such services received did not appear to be related to the authorized operations. However, the appellants subsequently submitted letter issued by OSD for Development Commissioner, KSEZ wherein they were granted extension for letter of approval upto 28/6/2012 in respect of manufacturing activity. It was found that since the authorized operation had not started in SEZ and so the services received did not appear to be related to the authorized operation . (e) No descriptive bifurcation of the services rendered and service wise service tax paid was provided by the appellants. Hence, in the absence of bifurcation/classification of services, claimed as Scientific Technical Consultancy Services it cannot be ascertained wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a developer or unit to carry on the authorized operations in the SEZ; (h) The appellants had claimed that they had received services related to Scientific Technical Consultancy Service from CHL. This means that manufacturing activity or authorized operation has not been started in the SEZ but they have got the work done from outside. However, the appellants had not submitted any documents/permission from KASEZ in this regard and as such this case cannot be considered as sub-contracting , as specified in Rule 41 of The Special Economic Zones Rules 2005 . 2.02. Being aggrieved by and dissatisfied with the order passed by the adjudicating authority rejecting the refund claim on the aforesaid ground, the respondent preferred appeal before the first appellate authority and the first appellate authority dismissed trhe said appeal confirming the order passed by the adjudicating authority. 2.03. Being aggrieved by and dissatisfied with the order passed by the first appellate authority, the respondent preferred an appeal before the CESTAT being Appeal No. 475 of 2011 and by the impugned Judgement and Order and relying upon the decision of the tribunal- Co-ordinate Bench i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period prior to the actual manufacture of final product can be said to be commercial activity / production or not and in para 5.1 (xix), the Division Bench has observed and held as under :- (xix) In the facts of the present case the assessee is engaged in the manufacture of medicaments. By their very nature, the drugs manufactured by the assessee prior to final production thereof are required to be subjected to technical testing and analysis before entering into commercial production. For such purpose, the products are manufactured in small trial batches and thereafter, sent for testing and analysis purpose. Undisputedly, when the goods are removed for testing and analysis, excise duty has been paid thereon. Since production of medicaments are subject to approval by the regulatory authorities of various countries to which such drugs are exported, the assessee is required to obtain approval before starting commercial production. Thus the final product can be manufactured only upon approval of the regulatory authority after the product undergoes technical testing and analysis. Under the circumstances, it cannot be gainsaid that the activity of testing and analys ..... X X X X Extracts X X X X X X X X Extracts X X X X
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