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2023 (11) TMI 614 - AT - Service TaxLevy of service tax - reverse charge mechanism - payments made by the appellant to USFDA as fees for obtaining approval - time limitation - penalty - HELD THAT:- On identical matter in the case of Vidhi Dyestuff Mfg. Ltd. versus Raigad [2016 (4) TMI 111 - CESTAT MUMBAI], a bench of this Tribunal held in similar set of facts the Tribunal in the case of M/S. KG. DENIM LTD. VERSUS CCE, SALEM [2014 (9) TMI 544 - CESTAT CHENNAI] had held that payment of charges for textile processing to M/s Testex, Swiss will not fall under the category of reverse charge mechanism. The ratio of the said judgment squarely covers the issue in the case in hand. As is evident from paragraph 3 of CBEC Circular No. 89/7/2006-ST dated 18.12.2006 even according to the Board, if an authority performs a service, which is in the nature of statutory activity and a fees is levied for the purpose it does not fall within the ambit of a taxable service, but if a service is performed by the authority, which is not in the nature of statutory activity it will be exigible to service tax. There cannot be any two opinions that USFDA is a statutory authority mandated by the US laws to regulate the import of pharmaceuticals into the country. It is the counterpart of the Drugs Controller General of India without whose approval pharmaceuticals manufactured abroad cannot be imported into India. Therefore, any fees paid to obtain the approval will get squarely covered even as per the CBEC Circular. The distinction drawn by the lower authorities between statutory authorities within India and the statutory authorities outside India has no legal basis. As the issue is found in favour of the appellant on merits itself, the submissions on the limitation and penalty need not be examined - Appeal allowed.
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