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TMI Blog2016 (11) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... d etc. There can be no doubt that such activity will involve innumerable trials, testing of intermediate and final resultant chemical entities and scientific analysis at every stage. In fact the service performed by the assessee is closely monitored by GRUNENTHAL by telephone, fax and e-mail. It is not the case that the assessee is in the position of a scientific or technical consultant to GRUNENTHAL. On the other hand, from the facts on offer, the assessee is only carrying out predominantly testing and analysis work - outsourced by GRUNENTHAL to them. The testing and analysis are primary protocol for carrying out the process research. This conclusion is borne out by the fact that chemicals Euro 150 per item will be additionally reimbursed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The activity of assessee does not involve in any knowledge sharing, advice, guidance or consultancy to be extended. All the related activities were undertaken by the appellants under the guidance of their clients. The activity results in creation of sample compound. The entire validity of service depends wholly on the Analytical testing of the resultant compound. This activity of analysis forms the basis for the entire activity of service. Finally, it is the analysis which is provided to the foreign clients and charged accordingly. Hence, the classification merits under Technical Testing and Analysis services (TTA). 22 Since all laboratory processes necessarily produce a compound which is later subjected to chemical laboratory analysis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds of appeal. 4, Ld. counsel Shri T.Jagapati Rao, on behalf of the assessee, contended that the services carried out by them are Scientific and Technical Consultancy and not 'Technical Testing and Analysis and that the impugned order was correct in law and did not call for any interferenc. 5. Heard both sides and have gone through the records of the case. For better appreciation of the issue at hand, the definitions of the two services, at the relevant time, are extracted as below: Section 65 (106) of the Finance Act, 1994 in relation to Technical Testing and Analysis Services defines as follows: Technical Testing and Analysis means any service in relation to physical, chemical, biological or any other scie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsultancy Services as under: Taxable service means any service provided or to be provided to any person, by a scientist or a technocrat, or any science or technology institution or organization, in relation to Scientific or Technical Consultancy . 6. The nature of the work carried out, as conveyed by the assessee, which is not disputed, has been taken note of by the original authority in the Order-in-Original is as follows: (i) ALPL carries out the research activities as per the specifications of the customers. Customers provide basic reagents, solvents and other ingredients required for conducting the research activity. (ii) On receipt of the lab reagents, solvents and other ingredients required for conducting the research, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular and final reporting in accordance to the provisions of this agreement and the protocol to be agreed upon (hereinafter the Services ) The parties are aware that the final contents and requirements of the SERVICES may be established only during the research work and thatcertain adjustments or deviations from the services defined in Annex may have to be made. 1.2) The formal requirements in accordance to the SOP DI 0003 by GRUNENTHAL have to be met for protocols and reports. 2) Execution of the SERVICES 2.1) The CONTRACTOR shall exercise its best efforts to perform the SERVICES applying the state of the art in science and research and observing all applicable laws and regulations. 2.2) CONTRACTOR will provide an experie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elephone, fax and e-mail( para 2.3 of agreement) . It is not the case that the assessee is in the position of a scientific or technical consultant to GRUNENTHAL . On the other hand, from the facts on offer, the assessee is only carrying out predominantly testing and analysis work - outsourced by GRUNENTHAL to them. The testing and analysis are primary protocol for carrying out the process research. This conclusion is borne out by the fact that chemicals Euro 150 per item will be additionally reimbursed to the assessee (para 42 of agreement). 9. In the event, we are of the considered opinion that the services carried out by the assessee are nothing but technical testing and Analysis services as defined at the material time in Sec-65 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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