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TMI Blog2024 (10) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Management and Resourcing Services (CMR services) provided by the appellant qualify as export of service? - HELD THAT:- It is found that in the show cause notice as well as in the impugned order, the allegation is with regard to CRM services whereas the demand has been confirmed against the appellant for entire turnover comprising of Data Management services as well as CRM services, which is bad in law because the turnover for Data Management services was 58% of the total taxable value and the turnover for CRM services was to the tune of 42% of the total taxable value and therefore confirming the entire demand under CRM services is not tenable. Further it is found that with regard to Data Management services, the department has accepted it as an export and has been granting regularly the refunds to the appellant, which is clear from the various refund orders placed on record. These refund orders have not been challenged and have attained finality which clearly establishes that Data Management services fulfill all the conditions of export as required in law. The services performed by the appellant are in the nature of testing and analysis service, even then, it will amount to exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant is engaged in the provision of various services to its customers located outside India. For providing such services, the appellant has its offices at various locations such as Gurgaon, Mumbai, Pune and Hyderabad. These locations are either SEZ/STP units or DTA locations. The appellant had entered into an Agreement dated 15.11.2007 with Ingenix Pharmaceutical Services (UK) Ltd (hereafter in short Ingenix ) for providing two types of services as specified in Exhibit A and Exhibit B of the Agreement annexed with the appeal papers. The services mentioned in Exhibit A are Information Technology Enabled Data Management and Programming Services (in short Data Management Services ) and the services mentioned in Exhibit B are Clinical Research Management and Resourcing Services (in short CRM services ). These two specified services were being rendered by the appellant from two distinct business locations registered under separate service tax registrations with the department. The DTA unit in Gurgaon was engaged in providing CRM services whereas STP units in Mumbai and Pune were engaged in providing Data Management services . 2.2 With respect to Data Management services, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal. 3. Heard both the parties and perused the material on record. 4.1 The learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed without properly appreciating the facts and the law; and binding judicial precedents. 4.2 The learned Counsel further submits that the appellant is not liable to pay interest on Cenvat Credit availed by them under Rule 14 of the Cenvat Credit Rules. He also submits that interest and penalties are imposed on the appellant on the ground that certain cenvat credits were availed by the appellant prior to obtaining registration. He further submits that the law does not mandate obtaining registration prior to availing of cenvat credit and this Tribunal in the appellant's own case vide Final Order No. 60798/2021 dated 06.04.2021 in Appeal No. ST/41/2012 has allowed such credits. He further submits that this issue is no more res integra and it has been consistently held by the Tribunal that for taking cenvat credit, registration is not mandatory as held in following cases: Optum Global Solutions India Pvt Ltd vs. Commissioner of Service Tax - Final Order No. 60798 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant for the entire turnover comprising of Data Management services the turnover of which was Rs.29,07,54,584/- (58% of the total value disputed) as well as CRM services the turnover of which was Rs.21,39,84,137/- (42% of the total value disputed). He further submits that the demand to the extent of inclusion of Data Management turnover is certainly not sustainable in law. 4.5 He further submits that export status of Data Management services cannot be disputed as the appellant has been consistently being granted refund of accumulated input tax credit for export of Data Management services. The appellant has furnished the sample copies of such refund sanctioning orders alongwith the Appeal paper-book for the period July 2007 to June 2010 including Order-in-Appeal for the period October 2008 to March 2009 where the refund was first rejected by the original authority. He submits that these orders were not challenged by the department and thus attained finality. Therefore, Data Management services fulfil all the conditions of export as required in law. 4.6 As regards CRM services, the ld. Counsel further submits that the services rendered by the Appellant under the CRM servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nix may qualify as technical testing and analysis services but not services rendered by the appellant which are only in the capacity of support or supervisory function and hence rightly classified as BAS. He further submits that collation of reports in a desired (digital) format is a Data Management service which department has already accepted as export of service. Even assuming without admitting CRM service involves collation of reports, they would be meant for and would be sent to Ingenix in UK and these services would be complete only when such reports are ultimately delivered to Ingenis, which is situated in the UK. He also submits that the impugned service, even assuming without admitting is in the nature of testing and analysis service, can be said to be partly performed outside India, to the extent of delivery of reports outside India and thus, qualifies as export of service under Export of Service Rules, 2005. For this, he relies on the following decisions: Commissioner of Service Tax, Ahmedabad vs. B.A. Research India Ltd - 2010 (18) STR. 439 (Tri. Ahmd.) Apotex Research Pvt. Ltd. vs. Commissioner of C Ex. ST, Bangalore - 2022 (63) G.STL 99 (Tri - Bang) C3i Consultants In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of credit availed by the appellant on merits and there is no demand issued to the appellant alleging that the credit is ineligible or recoverable. In the absence of valid demand and confirmation thereof in an adjudication, demanding interest under Rule 14 of Cenvat Credit Rules, 2004 read with Section 75 of the Finance Act, 1994 is not permissible in law. Therefore, we hold that the demand of interest is not sustainable. 8.1 As regards the second issue regarding export of CRM services, we find that in the show cause notice as well as in the impugned order, the allegation is with regard to CRM services whereas the demand has been confirmed against the appellant for entire turnover comprising of Data Management services as well as CRM services, which is bad in law because the turnover for Data Management services was 58% of the total taxable value and the turnover for CRM services was to the tune of 42% of the total taxable value and therefore confirming the entire demand under CRM services is not tenable. 8.2 Further, we find that with regard to Data Management services, the department has accepted it as an export and has been granting regularly the refunds to the appellant, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said service partly performed outside India, to the extent of delivery of reports outside India and thus, qualifies as export of service under Export of Service Rules, 2005 as held in the cases CST vs. B.A. Research India Ltd (supra), Apotex Research Pvt Ltd (supra) and C3i Consultants India Pvt Ltd (supra). 9. As regards extended period, we find that the appellant has not suppressed any material facts because the appellant has been filing returns regularly for Data Management services and was getting the refunds, which clearly establishes that the appellant has not suppressed any material facts; therefore, invocation of extended period is bad and thus, penalty imposed under Section 78 of the Act is not sustainable. Similarly, penalty of Rs.2,42,20,838/- imposed under Rule 15(4) of the Cenvat Credit Rules read with Section 78 of the Finance Act, 1994 is not sustainable because once the availment of cenvat credit without registration is valid in view of the various case-laws, then in the absence of any demand for recovery of alleged cenvat credit, imposition of penalty equal to credit amount is not sustainable in law. 10. In view of our discussion above, we are of the considere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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