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Kumud Drugs Pvt Ltd Versus Commissioner of Central Excise

2015 (10) TMI 1303 - CESTAT MUMBAI

Activity of supplying data of drug master file on receipt of consideration from certain customers – Appellant contends that service is for exclusive use of the buyer; restricted to transfer it to any other person – Further contended that definition of "Scientific or Technical Consultancy Services" does not cover the Appellant – Revenue contests that definition of ‘Scientific or Technical Consultancy Services' talks about advice or technical assistance provided to a client and the Appellant is co .....

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r (T) For the Appellant : Shri V.B. Gaikwad, Adv For the Respondent : Shri B. Kumar Iyer, Superintendent (AR) ORDER Per M V Ravindran This appeal is directed against Order-in-Appeal No. PII/VSGRAO/48/2011 dated 14/06/2011 passed by the Commissioner of Central Excise (Appeals - II), Pune. 2. Relevant facts that rise for consideration are that the appellant herein is a manufacturer of bulk drugs and having done extensive research on the manufacturing process of the bulk drugs, the appellant has cr .....

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r coming to such a conclusion both the lower authorities have confirmed the demands raised with interest and imposed penalties. 3. Learned Counsel would draw our attention to the various findings recorded by the lower authorities and submits that the supply of drug master file/technical package' is only for exclusive use of the buyer who purchase their final products and they cannot transfer this data or information to any other persons. He would then draw our attention to the definition of .....

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at the same view has been held by the Ahmadabad bench of the Tribunal in the case of Steelcast Ltd. Commissioner of Central Excise 2009 (14) STR 129 (Tri-Amd). 4. The learned Departmental Representative, on the other hand, would reiterate the findings of the lower authorities and submits that the definition of Scientific or Technical Consultancy Services' talks about advice or technical assistance provided to a client. It is his submission that the appellant is an organisation and provides t .....

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nufacturer of bulk drugs and provides the drug master file and technical package in respect of the bulk drug manufactured along with the supplies made to various buyers. It is also undisputed that the appellant had discharged sales tax liability on such drug master file and technical package. It is also not disputed that the drug master file and technical package are supplied to the customers who buys their final products and they are not recovering any charges and they have recovered the charge .....

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cal assistance, rendered in any manner, either directly or indirectly, by a scientist or a technocrat, or any science or technology institution or organization, to a client, in one or more disciplines of science or technology." 6. It can be seen from the above reproduced definition that, in order to attract service tax liability, the essential ingredients are that the services must be rendered by a scientist or a technocrat or any science or technology institution or organisation to a clien .....

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6. The Technical Support Charges recovered by the appellants are sought to be levied to Service Tax under Scientific or Technical Consultancy Service . Clause (92) of Section 65 of the Finance Act defines Scientific or Technical Consultancy to mean any advice, consultancy or scientific or technical assistance, rendered in any manner, either directly or indirectly, by a scientist or a technocrat, or any science or technology institution or organisation, to a client, in one or more disciplines of .....

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at date. Indeed the C.B.E. & C. D.O. Letter No. 334/1/2008-TRU, New Delhi dated 29th Feb. 2008 specifically states that by the Finance Bill, 2008, the said service is being specifically included in the list of taxable services. It is seen that the appellants being a company (i.e. body corporate) cannot be called a scientist or a technocrat as a scientist or a technocrat would be an individual. They are evidently also not a science or technology institute. The appellants have argued they also .....

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y referred to as science or technology organisations. In such a situation and having regard to the fact that the show cause notice or the impugned order does not elucidate as to on what basis this component of demand was covered under Scientific or Technical Consultancy Service and also the fact that this activity specifically became taxable with effect from 15-5-2008, the appellants' contention that they genuinely did not consider themselves to be science or technology organisation is not w .....

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nsidering the definition has held as under: "3. The appellant is basically a manufacturer of casting iron and casting articles, falling under Chapter 84/73 of First Schedule to CETA, 1985. The services so provided by them through their technically qualified Director, Vice President (Operation) and other competent personnel are basically for technical development and upgradation of the customer's equipments etc. The lower authority have observed that the debit note raised by the appellan .....

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