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TMI Blog2019 (3) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax. They have been discharging the service tax on the services rendered by them as well as on some services received by them under reverse charge mechanism. While verifying the CENVAT Credit availed by them during the period 2014-15, it was found by the department that they availed CENVAT Credit on (a) input services used in dutiable goods and (b) common input services used in both dutiable and exempted goods. They have not been availing CENVAT Credit on input services used solely in the manufacture of exempted goods. As far as the common input services are concerned, they have been reversing proportionate amount of credit attributable to exempted goods as per the formula prescribed in Rule 6(3A)(b)(iii) of CENVAT Credit Rules, 2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssified these services as 'Scientific and Technical Consultancy Service'. The Department felt that the nature of service is one of 'technical testing and analysis service' instead. The dispute is regarding classification of this service. 'Technical testing and analysis service' is covered under Section 65(105)(zzh) of the Finance Act, 1994 while 'Scientific and Technical Consultancy Service' is covered in Section 65(105)(za) of Finance Act, 1994. As per Rule 3(1)(ii) of Export of Services Rules 2005, as applicable during the relevant period, the services of 'technical testing and analysis' 65(105)(zzh) are deemed to have been exported only if such services are performed outside India. There is no such requirement as far as 'scientific and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d submit that the nature of their services to their clients were as follows: A) Perform all analytical process and product development activities, generate all development, validation, ANDA batch and supportive data for filling ANDA/DMF. B) Establish critical parameters like compounding procedure, filter study, tubing compatibility, light sensitivity etc. develop and validate finished products test methods, generate finished product COA etc. generate finished product COA etc., generate finished ANDA product stability testing protocol, conduct stability testing of ANDA batches and analyse stability data and issue stability report. C) Prepare reports like method and validation reports, manufacturing process flow diagram etc. a) Provide Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n USA and receiving remuneration for these services in foreign exchange. Therefore, this is purely a case of export of services as per Export Services Rules, 2005. The demand of service tax on this ground is not sustainable at all. He would also argue that they have been registered with the Department and having been paying both service tax and central excise duty. The department was fully aware of the nature of their activities and therefore there was no fraud, collusion, wilful misstatement, suppression of facts etc. The demand was for the period October 2010 to March 2015 and the show cause notice was issued after the period of limitation on 31.03.2016. Therefore, the demand is not sustainable on limitation as well. 8. As far as the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tific and technical consultancy service. We respectfully follow the ratio of the order. In another case of M/s SAI Life Sciences Limited [2016(42) S.T.R. 882 (Tri.-Mumbai) (in which Shri M.V. Ravindran was a Member), similar view was taken. We find that no reason to deviate from these decisions. We hold that the services rendered by the appellant in this case have to be classified as 'Scientific and Technical Consultancy Services'. 11. As far as reversal of CENVAT Credit under Rule 6(3A)(iii) of CCR 2004 is concerned, the formula given is clear. It should be E/F x G. There is no dispute regarding 'E' and 'F' in this case. As per the Rule, 'G' denotes the total CENVAT Credit taken on input services during the month and not CENVAT Credit tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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