TMI Blog2011 (8) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... to June 2006 along with interest and penalty if any on this amount of demand that is quantified. - ST/192/07 - A/1476/2011-WZB/AHD - Dated:- 11-8-2011 - Hon'ble Mr. M.V. Ravindran, Member (Judicial) Hon'ble Dr. P. Babu, Member (Technical) Appellant : Shri H.D. Dave, Adv. Respondent : Shri S.K. Mall, SDR Per: Mr. M.V. Ravindran: This appeal is directed against Order-in-Original No. STC/08/COMMR/AHD/2007-08, dt.26.09.07. 2. The relevant fact that arises for consideration is, for the period from July 2003 to June 2006, appellants were providing services of clinical trials to their customers. After an investigation, Revenue Authorities were of the view that the services rendered by the appellant would get categorized under Technical Testing and Analysis Services under Section 65 (106) of the Finance Act, 1994. Coming to such a conclusion, show cause notice was issued to the appellant for demand of service tax, interest thereof and consequent penalties were proposed. Appellant contested the show cause notice before the adjudicating authority on the ground that the services rendered by them will not fall under the category of testing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices . 6. We have considered the submissions made at length by both sides and perused the records. 7. The issue involved in this case is regarding whether the appellants services i.e. conducting clinical trials for their customers would get covered under the category of the services technical testing and analysis services for the period July 2003 to 30.04.06. 8. On perusal of the records, it is seen that there is no dispute that the appellant is providing clinical trials for the new products which were to be introduced in the market by some accepted scientific method. It is also not a disputed that such testing is in relation to the physical, chemical and biological testing and also it is undisputed that it is being done on the human beings and on the animals. We find that adjudicating authority while coming to a conclusion that the appellant had provided the services has recorded the following findings. 44. The second issue raised by M/s. Synchron Research Services (P) Ltd., Ahmedabad, is that the explanation introduced on 01.05.06 is not merely of clarificatory nature but actually expands the scope of the taxable service. It is a settled law that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of doubts, it is hereby declared that for the purposes of this clause, 'technical testing and analysis' includes testing and analysis undertaken for the purpose of clinical testing of drugs and formulations; but does not include testing or analysis for the purpose of determination of the nature of diseased condition, identification of a disease, prevention of any disease or disorder in human beings or animals. 10. We find strong force in the contentions raised by the learned counsel that this issue has been settled by this very same Bench in the case of B.A. Research India Ltd. (supra). We with respect, reproduce the ratio of the said judgment. "8.?We have considered the submissions made by both the sides. The Commissioner's observation which led to the conclusion that notifications have retrospective effect are reproduced :- 53.?The noticee has submitted that the explanation has the effect of expanding the scope of Technical Testing and Analysis service as it existed prior to 1-5-2006. Their argument is that there are two types of tests conducted on drugs. The first type is testing of the quality, purity, composition, strength etc. of the drugs themselves. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nimals was excluded. To make it includable in the definition, the amendment becomes necessary. Therefore, as contended by the appellants, the amendment in reality expounded the scope of the definition and therefore, it cannot be clarificatory in nature. 9.?We are supported in taking this view from the decisions cited by learned advocate in the case of Skycell Communications Limited. The Tribunal was considering the explanation added to Notification No. 11/97-Customs, dated 1-3-1997 by amending Notification No. 03/98-Customs, dated 11-2-1998. Originally serial No. 173 provided rate of duty for computer software. By Notification No. 03/98-Cus., the explanation was added expanding the meaning of computer software and specifically provided that term does not include software required for operation of any machine performing a specific function, other than data processing and incorporating or working in conjunction with an automatic data processing machine. The Tribunal observed that the explanation imposed restriction prejudicially on importers of computer software and hence cannot be given retrospective effect. In the case of Gothi Thermoforming Inds. the Tribunal observed that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory since amendments made explicit what was already explicit in the heading. We had already observed that in this case, the explanation extended the scope of definition and something which was not included in the definition was later on included. This case is exactly opposite namely, the explanation made something explicit which was not at all available in the first place. Therefore, it cannot be said to be retrospective in this case. The case of WPIL limited cannot be compared with the present case since it was not the explanation which was being considered. In the case of Indian Tobacco Association, it was held that to give retrospective effect intent object of legislature can be culled out from the background facts. In this case there are no background facts and therefore legislative intent is not coming out clearly. 12.?On consideration of various citations before us and analysis of facts, the amendments brought out by introduction of explanation, we conclude that this explanation cannot have retrospective effect. On this ground alone, appellants succeed. Therefore, we are not going to the other grounds relating to export of services and consider the question as to whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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