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TMI Blog2019 (3) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... ientific and Technical Consultancy’ Service - On an identical case, in the case of Midas Care Pharmaceuticals Pvt. Ltd. [2014 (8) TMI 743 - CESTAT MUMBAI], the coordinate Bench held that the nature of activity for development of a pharmaceutical product testing etc. falls under the category scientific and technical consultancy service - the services rendered by the appellant in this case have to be classified as ‘Scientific and Technical Consultancy Services’. CENVAT Credit - common input services used both in dutiable as well as exempt goods - non-maintenance of separate records - Appellant have been reversing proportionate amount of credit attributable to exempted goods as per the formula prescribed in Rule 6(3A)(b)(iii) of CENVAT Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case in brief are that the appellant manufactures excisable goods and also provides output services and have taken a centralized registration for service tax. They have been discharging the service tax on the services rendered by them as well as on some services received by them under reverse charge mechanism. While verifying the CENVAT Credit availed by them during the period 2014-15, it was found by the department that they availed CENVAT Credit on (a) input services used in dutiable goods and (b) common input services used in both dutiable and exempted goods. They have not been availing CENVAT Credit on input services used solely in the manufacture of exempted goods. As far as the common input services are concerned, they h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Credit Rules, 2004. 5. The second point of dispute is that the assessee was providing services to their clients M/s Sagent Pharmaceuticals Inc. , USA under an agreement and classified these services as Scientific and Technical Consultancy Service . The Department felt that the nature of service is one of technical testing and analysis service instead. The dispute is regarding classification of this service. Technical testing and analysis service is covered under Section 65(105)(zzh) of the Finance Act, 1994 while Scientific and Technical Consultancy Service is covered in Section 65(105)(za) of Finance Act, 1994. As per Rule 3(1)(ii) of Export of Services Rules 2005, as applicable during the relevant period, the services of tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that both demands are not sustainable both on merits and also on limitation; consequently the penalties also need to be set aside. As far as the demand of service tax is concerned, he would submit that the nature of their services to their clients were as follows: A) Perform all analytical process and product development activities, generate all development, validation, ANDA batch and supportive data for filling ANDA/DMF. B) Establish critical parameters like compounding procedure, filter study, tubing compatibility, light sensitivity etc. develop and validate finished products test methods, generate finished product COA etc. generate finished product COA etc., generate finished ANDA product stability testing protocol, conduct stab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tific or technical consultancy. Therefore, the services rendered by them deserves to be classified under section 65(105) (za) as Scientific and Technical Consultancy. They were rendering the service to their client in USA and receiving remuneration for these services in foreign exchange. Therefore, this is purely a case of export of services as per Export Services Rules, 2005. The demand of service tax on this ground is not sustainable at all. He would also argue that they have been registered with the Department and having been paying both service tax and central excise duty. The department was fully aware of the nature of their activities and therefore there was no fraud, collusion, wilful misstatement, suppression of facts etc. The deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are Pharmaceuticals Pvt. Ltd. as reported at [2015(37)S.T.R. 346 (Tri.-Mumbai)], the coordinate Bench held that the nature of activity for development of a pharmaceutical product testing etc. falls under the category scientific and technical consultancy service. We respectfully follow the ratio of the order. In another case of M/s SAI Life Sciences Limited [2016(42) S.T.R. 882 (Tri.-Mumbai) (in which Shri M.V. Ravindran was a Member), similar view was taken. We find that no reason to deviate from these decisions. We hold that the services rendered by the appellant in this case have to be classified as Scientific and Technical Consultancy Services . 11. As far as reversal of CENVAT Credit under Rule 6(3A)(iii) of CCR 2004 is concerned, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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