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2019 (3) TMI 1437 - AT - Service TaxClassification of services - assessee was providing services to their clients M/s Sagent Pharmaceuticals Inc., USA - whether classified under Scientific and Technical Consultancy Service or otherwise or technical testing and analysis service? - Held that:- The nature of activities undertaken by the appellant is undoubtedly much more than mere testing and analysis. It comprises a variety of activities starting from the development of the product suitable for the market based on API to conducting tests and turnover information to their clients for further use. These activities cannot be called mere ‘technical testing and analysis’ but fall under ‘Scientific 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 Credit Rules, 2004 - Held that:- This wrong availment of CENVAT credit needs to be reversed by the appellant and the demand on this ground made in the impugned order needs to be sustained - although the appellant has been filing the returns with the department, they are also expected to not violate any provisions of the Acts or Rules or orders made there under to avail excess CENVAT Credit and thereby evade duty. The ST-3 returns do not require the details of the calculation made as it is expected that the assessee does the calculation on their own correctly. In this case, where there is no ambiguity in the rule itself, the appellant has clearly violated the rule and availed the ineligible CENVAT Credit and therefore the same needs to be reversed for the entire period of demand. The demand of excess CENVAT Credit taken by the appellant under Rule 14 of CCR 2004 read with Section 73(1) of the Finance Act 1994 along with interest under section 75 as well as penalty under rule 15(3) of CCR 2004 needs to be upheld - appeal disposed off.
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