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TMI Blog2014 (11) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of the services provided in respect of technical inspection and certification services, that also in respect of the finished goods which are manufactured and to be manufactured, the services in our considered view will fall within the expression ‘activities of business’. It is a common knowledge that before introducing any final product especially P & P Medicaments, detailed analysis; research and technical study requires to be undertaken as to the efficacy, side effect and tolerance of the medication. The service provider conducts all these experiments and certify as to the acceptability of the said medicaments. - appellant is eligible to avail CENVAT Credit of the Service Tax paid on technical inspection and certification charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue and submitted that the CENVAT Credit availed of the Service Tax paid on technical, inspection certification services is for the purpose of study of the drug formulation which they want to introduce into the market. It is his submission that the Revenue is denying the credit only on the ground that the said product for which certification services was obtained, are not yet manufactured and hence CENVAT Credit is not eligible. It is his submission that there is no one to one co-relation contemplated in the CENVAT Credit Rules, 2004. He would draw our attention to the judgment of Hon'ble High Court of Gujarat in the case of Cadila Healthcare Ltd - 2013 (30) STR 3 (Guj.) and more specifically to Para No.5.6. It is his submission th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputedly, the services of technical inspection and certification are provided by the service provider in respect of the P.P. medicaments manufactured and to be manufactured by the appellant. It is on record that the appellants have themselves stated that some of the services are for the products which are to be manufactured in future. 8. On such a factual matrix, we note that there being no dispute as to the receipt of the services provided in respect of technical inspection and certification services, that also in respect of the finished goods which are manufactured and to be manufactured, the services in our considered view will fall within the expression activities of business . It is a common knowledge that before introducing any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) The learned counsel for the appellant reiterated the reasoning adopted by the adjudicating authority and submitted that such service is not used in or in relation to the manufacture of final products directly or indirectly and is, therefore, not covered by the definition of input service. (ii) On the other hand, Mr. Patel for the assessee submitted that in the course of manufacture of drugs/medicines, the respondent uses various instruments/equipment such as gauges, scales, vernier calipers, temperature indicators, thermo hygrometers, etc. In terms of the Drugs and Cosmetics Rules, 1945, the respondent is required to observe Good Manufacturing Practices, one of the requirements of which is that instruments, bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertification services have been availed of by the assessee in respect of inspection and checking of instruments which are used for the purpose of measuring size : gauges and vernier calipers, measuring weight : scales, and measuring temperature : temperature indicators, and instruments like thermo hygrometers for measuring humidity and temperature, etc. which are all in the nature of precision instruments which measure various factors with precision. Such instruments/equipments, by their very nature are required to be of the required standards, accurate and precise. For the purpose of maintaining such qualities the instruments/equipments are required to be checked and properly calibrated from time to time for which purpose the respondent re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act which is one of the clauses specified under sub-rule (5) of Rule 6 of the Rules. The Tribunal was, therefore, justified in holding that such service fell within the purview of input service as contemplated under Rule 2(l) of the Rules. This issue, accordingly, stands answered in favour of the assessee and against the revenue. 11. In our considered view, the ratio as laid down by Hon'ble High Court would cover the issue in favour of the assessee and we hold that the appellant is eligible to avail CENVAT Credit of the Service Tax paid on technical inspection and certification charges as also the technical testing services. 12. The impugned order is set aside to the extent it is challenged before us and the appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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