TMI Blog2022 (4) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the service which is provided by the appellant to their foreign client is analysis report of the samples and not any goods. The collection of samples, analysis thereon is conducted by the appellant in India. It is undisputed fact that the appellant are not receiving any goods from their foreign client but conducting the tests. As per Rule 3 of POPS Rules, the place of provision of service shall be the location of the recipient of service. In the present case, the location of the recipient of service is in abroad. Therefore, the service deemed to have been provided in abroad at the place of service recipient - In the present case, it is beyond any doubt that the service recipient has not physically made available any goods to the appellant being a service provider. The service recipient has no connection in any manner with regard to the collection of samples. It is the appellant who on their own procured the samples from the hospitals and conduct the analytical tests. The appellant have only providing the test reports in electronic or web form to the recipient of service i.e. their foreign client. Therefore, the specific condition under Rule 4 that the service should be provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, gender, disease or disorder and the source to procure the samples from i.e. hospitals, research centers, etc. These samples are drawn as per specific requirements of testing or analysis as per the SOW received from the clients. The samples are not provided by the clients of the appellant nor do they belong to the clients nor are they returned to the clients. The appellant procures the said samples for the purpose of tests and analysis from certain hospitals and research centers. These institutes charge certain amount from the appellant towards the cost of testing and drawing of these samples. The amount paid to the institutes is not for purchase of samples but the amount paid is only towards reimbursement of service cost for drawing of samples. After the samples are drawn, the DNA/RNA may also be extracted by the appellant or is done by the institute that supplied the samples and then the appellant performs its tests and analysis to prepare the final report desired by their clients. The final report is sent to clients electronically. The deliverables of the assessee-appellant are used by the clients for further research, manufacture or publication in research journals outside In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (7) of Section 2 of the Sale of Goods Act, 1930. The said section defines goods to mean every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. He submits that by no stretch of imagination, the samples of blood or tissues can be called as moveable property or satisfying any other description in the definition of the term goods as mentioned above. The samples are not marketable or saleable and in fact not marketed or bought or sold and therefore they don t satisfy the test of qualifying to be goods . He further submits that in the present case, the samples are not made available by the recipient of the services to the appellant and are procured by the appellant at its own discretion and cost. He submits that the allegation in the show-cause notice as well as the finding in the impugned order to the effect that the samples are made available by the clients is factually incorrect as evidenced from the documents placed on record. In this regards, he refers to the invoice issued by Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, the Department was aware of the export claim of the assessee-appellant since beginning. In view of these facts, demand of extended period and imposition of 100% penalty is not sustainable. Learned counsel prays for allowing the appeal filed by the assessee-appellant. 3. On the other hand, Smt. D.S. Sangeetha, learned Additional Commissioner(AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. She submits that since the testing was carried on the samples viz. blood, tissues etc., it cannot be said that the service was not provided in respect of goods; therefore, the assessee s service cannot fall under the category of export of service and hence the same is taxable. 4.1. We have carefully considered the submissions and perused the records. The issue to be decided in the present case is that whether the service provided by the assessee-appellant qualifies as export of service or otherwise in the facts of the present case. As the facts narrated above, the appellant-assessee M/s. MedGenome Labs Limited is a service provider and the MedGenome Inc., USA is the service recipient. The foreign client approaches the appellant for analysis and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any use in the taxable territory, other than that which is required for such repair. (b) services provided to an individual, represented either as the recipient of service or a person acting on behalf of the recipient, which require the physical presence of the receiver or the person acting on behalf of the receiver, with the provider for the provision of the service. As per Rule 3 of POPS Rules, the place of provision of service shall be the location of the recipient of service. In the present case, the location of the recipient of service is in abroad. Therefore, the service deemed to have been provided in abroad at the place of service recipient. In exception to the above Rule 3, the place of provision of service on the basis of performance is provided under Rule 4; according to which, if the services are provided in respect of goods that are required to be made physically available by the recipient of service to the provider of service or person acting on behalf of the provider of service in order to provide the service, the place of provision of service shall be the location of the services which are actually performed. In the present case, it is beyond any doubt t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and the rebate shall be allowed subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification. Applying the above Rule in the fact of the present case, the provider of service i.e. the appellant is located in India which is the taxable territory, recipient of service i.e. client of the appellant is located outside India. The service is not specified in Section 66 of the Finance Act. As per the discussion made hereinabove, the place of provision of service is clearly outside India. There is no dispute that the payment of such services has been received by the appellant as a service provider in convertible foreign exchange. In view of the above, the appellant have clearly satisfied the conditions required for treating the service as export of service. Therefore, the appellant s service, being export of service, cannot be chargeable to service tax. 4.2. Since we have made out our opinion on the basis of clear facts of the present case and strictly interpreting the statutory provisions, we do not feel to discuss the judgements cited by the rival sides. Since the appeal is decided on its merits itself, we need not go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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