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TMI Blog2025 (2) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... ties may not at all be in the nature of service or they would probably fall under some other service head. We also find that there is a clear provision under Rule 4A to give, inter alia, specific description of the services irrespective of whether it is meant for consumption within the country or abroad. Since they have used only abbreviated/short terms in their export invoices, the Adjudicating Authority was correct that it would not be possible for them to classify the same and since the appellant failed to convince the department that their export services are taxable, the next question would be whether the credits would also be not admissible in view of the fact that the services were exempted services, without resorting to proving any nexus or otherwise. A great deal of services are covered within the category of agreements and covered within the schedule to the agreements. Schedule-A covers operational services: development, with generic description as development. The definition itself says that 'to provide services and developmental support' and gives certain examples. Merely by going through these services, one cannot arrive at proper classification during the pre-negativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service not being a taxable service as also on account of input services not having any nexus with the output service. 2. Learned Advocate for the appellant submits that they are providing various output services like 'Business Support Services' (BSS) and 'Information Technology Software Services' (ITSS) and for that they have entered into Agreements dated 15.08.2005, 01.01.2007 & 31.08.2009 with their parent company i.e., Novartis Pharma AG, Switzerland and Novartis Pharmaceutical Corporation, USA. As per the said service agreements, they were required to provide various operational support services like information technology services, clinical/analytical data management, technical & clinical support, preparation of various medical and statutory reports, clinical research service, serology & pathology service, etc. Further, in order to provide such output services, the appellants were receiving and using various input services. However, since the appellants were unable to utilize Cenvat credit on those input services as their entire output services were exported, they have claimed refund of credit attributable to output services exported by them from time to time. The refund cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d both sides and perused the records. 6. There are broadly two issues involved in these appeals, which are as follows:- a) Whether in the absence of sufficient documents or description in the export invoice, can the service be treated as non-taxable or exempt service as such; and b) If they are treated as taxable service, can the credit be allowed if there is no nexus between the input service and the output service. 7. We find that the Adjudicating Authority has examined both the issues and insofar as the first issue is concerned, the Adjudicating Authority has examined various services covered in the agreements between the appellant and their parent company. He observed that unless the export invoice reflects clear description of service, it would not be possible to come to the conclusion as regards nature of the service. Further, he has also examined the claimed services within which the services contained in the agreements would fall i.e., ITSS and BSS. Since there were no details available in the invoices, the proper classification could not be arrived at and held that unless the output service is taxable service classifiable under one of the taxable services, it would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed under BSS or ITSS, there could be possibility that some of these activities may not at all be in the nature of service or they would probably fall under some other service head. We also find that there is a clear provision under Rule 4A to give, inter alia, specific description of the services irrespective of whether it is meant for consumption within the country or abroad. Since they have used only abbreviated/short terms in their export invoices, the Adjudicating Authority was correct that it would not be possible for them to classify the same and since the appellant failed to convince the department that their export services are taxable, the next question would be whether the credits would also be not admissible in view of the fact that the services were exempted services, without resorting to proving any nexus or otherwise. 10. We have gone through the submissions of the appellants and we find a great deal of services are covered within the category of agreements and covered within the schedule to the agreements. Schedule-A covers operational services: development, with generic description as development. The definition itself says that 'to provide services and develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ie, it appears that the lower authority has ignored the appellant's vital submissions and the documents which the appellant considered in their favour and rejected their claim without justifiable reasons and findings. He had gone beyond the scope of the show cause notice which is in violation of principles of natural justice. Therefore, I find it appropriate that the issue is re-examined afresh ensuring principles of natural justice." Therefore, this is not the finalization of classification as proposed/submitted by the appellant, rather only an observation by the Commissioner (Appeals) and the entire matter was remanded back to the Original Authority for reexamination and to be decided on merit. 13. We also note that since they have already held that the export service is non-taxable/exempt service, they have not gone into the issue of ineligibility on account of nexus between input and output services. We have seen the nature of services in respect of which the credit has been taken and find that most of these services would be eligible, in view of settled legal position. However, since this issue has not at all been discussed by the Adjudicating Authority even when the same was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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