9911796707
TMI Blog2009 (8) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax of Rs. 3,11,520 together with interest has reduced the penalty to Rs. 15,000. 2. Heard both sides and perused the records. 3. The applicants are engaged in the manufacture of P&P medicaments falling under Chapter Heading No. 30 of the CETA, 1985. 4. The brief facts of the case are that the applicants have entered into manufacturing agreement with customers viz., M/s. Lupin Lab, M/s. Ranbaxy Lab, and M/s. Polymed Health Care and as per agreement they are required to manufacture the goods out of raw materials and packing materials supplied by the customers and clear the same on payment of duty. During the process of manufacture, the customers required them to make in process analysis of semi-finished goods as well as final products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalties under sections 76, 77 and 78 of the Finance Act, 1994. On appeal, the Commissioner (Appeals), while confirming the demand of service tax together with interest reduced the penalty to Rs. 15,000 as referred to above. We extract below the relevant portion of the Order passed by the Commissioner (Appeals) : "(6) I have carefully gone through the records of this appeal, the written as well as oral submissions of the appellant and in course of personal hearing. In this regard clarification as to whether testing and analysis services were undertaken by the appellant with reference to processing of semi-finished goods and finished goods, during the course of manufacture or the appellant undertook testing and analysis services, with ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15,000 only would be appropriate considering the facts and circumstances, in this case. Further the matter is largely dependent on interpretation of provision of law. The appeal is disposed of as above by modifying the Order-in-Original." 6. The issue involved in the instant case is whether the services provided by the applicants are research and development service as claimed by them or technical testing and analysis service as held by the Department. 7. The applicants have contended that it will be evident from paras 1 & 2 of the agreement with M/s. Ranbaxy that the applicants are required to provide the services of research and development of the product. The research and development activity inter alia involves— * Determining the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that they are charging separately for testing and analysis and the value of the services provided are available. Hence, the same are taxable under the category of technical and analysis services. 10. We find that the issue is arguable one and can be dealt with in detail at the time of the final hearing of the same. The applicants have contended that out of Rs. 30,54,110 for which the debit notes were issued only for Rs. 24,55,585 have been remitted to them and balance amount has either been not received or the debit note has been cancelled. Hence, the service tax liability works out to Rs. 2,50,470 and not Rs. 3,11,520 as the liability for payment of service tax arises only after the receipt of payment in terms of rule 6(1) of the Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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