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TMI Blog2020 (12) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... RIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I [ 2015 (12) TMI 80 - CESTAT NEW DELHI] and also in the case of M/S RAJ PETRO SPECIALITIES P LTD VERSUS C.C.E. S.T. - SILVASA [ 2018 (8) TMI 1179 - CESTAT AHMEDABAD] in identical facts and circumstances, we do not find merit in confirming the Service Tax demand for the charges deducted by the foreign banks under the category of Banking and other Financial Services , where it was held that Any bank charges paid by Indian Bank to the Foreign Banks even though in connection with import and export of the goods and the same was debited to the appellant, the service tax liability does not lie on the appellant. Scientific or Technical Consultancy Services - services received by the appellant from M/s Dada Consultancy and M/s Phara Dr. D.R. Ivan - HELD THAT:- The learned Commissioner in the impugned order, even though accepted that the overseas firms are providing consultancy services, which meant to be used in obtaining marketing right of the appellant to their manufactured pharmaceutical products, but proceeded to observe that the said consultancy of clinical and non-clinical overviews of the literature were scientific in nature, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audit, it came to the notice of the Department that service tax was not paid under reverse charge mechanism on the deductions made by the foreign banks while delivering the inward remittance in foreign currency to the Indian Banks and the net amounts received by the appellant generally relating to sale proceeds of exports sale of finished goods; as well as sale of dossiers/licenses. It is alleged that the services provided by the foreign banks covered under the category of "Banking and other Financial Services" defined under Section 65(105)(zm) of the Finance Act, 1994 and accordingly service tax amounting to ₹ 45,02,307/- was demanded for the period 2006-07 to 2011-11. The appellants had received certain services from two foreign consultants namely, M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban. It is alleged that such services are covered under the taxable category of "Scientific or Technical Consultancy Services" defined under Section 65(92) of Finance Act, 1994 read with Section 65(105)(za0 of the Finance Act, 1994. Consequently, service tax amounting to ₹ 78,06,183/- was demanded with interest and penalty. On adjudication, both the demands of ₹ 45,02,30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of regulatory consultancy service under Scientific or Technical Consultancy Services received from the consultants namely, M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban. The learned Advocate has submitted that the appellants have engaged M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban for compilation of data on clinical overviews and non-clinical overviews, which are compiled on the basis of relevant published scientific literature as well as relevant parts of dossiers and information with regard to product composition, product impurity specification, analytical result during the stipulated test and impurity specification of the goods, substance including residual solvents. He has submitted that such written overviews are required to be enclosed as part of application to be filed before the Regulatory Authority in foreign countries for marketing their pharmaceutical manufactured products marketable in the European Union. M/s Dada Consultancy and M/s Pharphe Dr. D.R. Iban provide the services which are in nature of overviews and do not involve application of pure sciences for conducting research on samples of pharmaceutical products. Such services are not used for any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and copy of ST-3 returns, financial statements and Ledger extracts etc. for the relevant period of Audit. Particularly, during the course of audit of payments made to non-residents had been duly examined by the Audit Officer and objections relating to payment of Service Tax under reverse charge mechanism for payments made to M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban were raised and the appellants filed their written reply from time to time clarifying their stand. Also, opinion of the Consultant obtained by the appellant on the said issue had been submitted along with their reply to the Audit queries. Therefore, there is no suppression of facts by the appellants; they have started discharging duty on such consultancy charges w.e.f. 1.6.2007 on receiving the said services from the foreign service-provider namely, M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban. In support, he has referred to the judgment of Hon'ble Supreme Court in the case of CCE Vs. Chempher Drugs and Liniments - 1989 (40) ELT 276 (SC), Padmini Products Vs. CCE - 1989 (43) ELT 195 (SC), Pushpam Pharmaceuticals Company Vs. CCE, Bombay - 1995 (78) ELT 401 (SC), Anand Nishikawa Co. Ltd. Vs. CCE, Mee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the opinion of the Tribunal was expressed while disposing the stay application being not a final order, hence not a binding precedent. The said reasoning cannot be a sound one as in the final disposal of the appeal, this Tribunal reiterated the same principles as expressed while disposing the stay application. Therefore, following the principles laid down in Green Ply Industries Ltd.'s case and also in the case of Raj petro (supra) in identical facts and circumstances, we do not find merit in confirming the Service Tax demand for the charges deducted by the foreign banks under the category of "Banking and other Financial Services". Thus, the demand on this count is liable to be set aside. 13. The next issue relates to payment of Service Tax on the consultancy charges paid to M/s DADA Consultants and M/s Pharphe Dr. D.R. Iban for compiling clinical and non clinical overviews. The contention of the learned Advocate is that the said clinical and non-clinical overviews was compiled on the basis of relevant published scientific literature as well as on relevant parts of the dossier and information with regard to the product, such as product composition, product impurity specificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... field of social sciences for e.g. Health Policy Research, Bio-mass Project, Change Management, Water and Sanitation Material Development, City Consultation in Hyderabad, Energy Management. These activities come within the areas of 'Research in Social Sciences' which in our view would not fall within the purview of 'Scientific and Technical Consultancy'. Whereas when we go through the definition of 'Scientific and Technical Consultancy' let us reproduce it again : "Scientific or technical consultancy" means any advice, consultancy, or scientific or technical assistance rendered in any manner, either directly or indirectly, by a scientist or a technocrat, or any science or technology institution or organization, to a client, in one or more disciplines of science or technology; Section 65(105)(za) of the Act defines the taxable service as follows : 65(105) taxable service means any service provided or to be provided .......... (za) to a client by a scientist or a technocrat, or any science or technology institution or organization, in relation to scientific or technical consultancy. 14. It is very clear that in order to assert that an organization is providing scientific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r v. IPCA Laboratories Ltd. - 2019 (29) G.S.T.L. J177 (Bom.)] 15. Besides there is also force in the arguments of the learned Advocate for the appellant that the demand is barred by limitation as during the course of audit by the Department, specifically the issue of applicability of Service Tax for payments made to M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban have been examined by the Department to which the appellant filed a reply enclosing the opinion of legal experts on the subject. Also, it is not in dispute that the appellant has started discharging Service Tax on the said services w.e.f. 01.06.2007 under the category of 'Management and Consultancy Services' to which the Department did not raise any objection and the ST-3 returns have been assessed from time to time. We also find merit in the contention of the learned Advocate that since they would be eligible to avail credit of the Service Tax paid on reverse charge mechanism, hence there could not be any incentive/intention to evade payment of Service Tax. In these circumstances, the demand for the period 2006-07 is not sustainable being barred by limitation. 16. In the result, the impugned order is set aside and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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