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2016 (11) TMI 107 - CESTAT HYDERABADClassification of service - organic synthesis and related process research - classified under Scientific and Technical Consultancy (STC) service or Technical Testing and Analysis (TTA) service? - Section 65 (106) - Section 65 (105) (zzh) - Section 65 (105) (za) of the Finance Act, 1994 - Held that: - the assessee is required to synthesize chemical entities and submit monthly reports of the progress thereof. Merit is found in the departments' contention that these test reports are more about the produced compound in terms of its purity, constituents, the degree of deviation from expected etc. There can be no doubt that such activity will involve innumerable trials, testing of intermediate and final resultant chemical entities and scientific analysis at every stage. In fact the service performed by the assessee is closely monitored by GRUNENTHAL by telephone, fax and e-mail. It is not the case that the assessee is in the position of a scientific or technical consultant to GRUNENTHAL. On the other hand, from the facts on offer, the assessee is only carrying out predominantly testing and analysis work - outsourced by GRUNENTHAL to them. The testing and analysis are primary protocol for carrying out the process research. This conclusion is borne out by the fact that chemicals Euro 150 per item will be additionally reimbursed to the assessee - the services carried out by the assessee are nothing but " technical testing and Analysis" services as defined at the material time in Sec-65(105) of the Finance Act, 1994. Appeal allowed - decided in favor of Department.
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