9911796707
TMI Blog2023 (11) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, but had reduced the penalty imposed upon the appellant under section 78 to 50%. 2. The appellant manufactures pharmaceutical products, which it also exports. It is registered with the Service Tax Department for providing various taxable services. During the course of audit of the appellant's record on 24.03.2015, it was found that the appellant had shown in its balance sheet that it paid an amount of Rs. 2,96,77,707/- to the United States Food & Drugs Administration as fees to obtain approval to export its products. It appeared to the audit that the amount so paid falls under the category of "Technical Inspection and Certification Agency Service" under section 65 (105) (zzi) of the Finance Act [Act], 1994 and the service recipient w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty or even suppression of facts. It was open for the officers to scrutinize the returns and call for any records which they deem necessary for the purpose. Evidently, the information regarding the payments made to the USFDA were available in the records of the appellant itself ; (3) Extended period of limitation also cannot be invoked for the reason that the present case is completely revenue neutral. Had the appellant paid service tax on the fees paid to the USFDA for obtaining approval for export of its products, the same would have been available to it as Cenvat credit and, therefore, there cannot be any intention to evade payment of duty and without the intent, extended period of limitation cannot be invoked; (4) There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed. The facts in the case are that the appellant had sought certification of their products by Food and Drug Administration, USA for the products manufactured by them. The Food and Drug Administration of USA certifies the quality of the products which enables the appellant to sell the products in USA, where it is statutorily required that the such products needs to be certified by US FDA. It is the case of the appellant that the certification is nothing but a statutory requirement and the amounts paid by them to US FDA are nothing but fees. 5. With regard to the contentions raised by them learned counsel that in order to market the goods in USA the products needs to be certified by US FDA for which they have to pay a fee which have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risen whether such activities provided by a sovereign/public authority required to be provided under a statute can be considered as 'provision of service' for the purpose of levy of service tax. 2. The issue has been examined. The Board is of the view that the activities performed by the sovereign/public authorities under the provision of law are in the nature of statutory obligations which are to be fulfilled in accordance with law. The fee collected by them for performing such activities is in the nature of compulsory levy as per the provisions of the relevant statute, and it is deposited into the Government treasury. Such activity is purely in public interest and it is undertaken as mandatory and statutory function. These are not in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory function. Therefore, any fees paid to obtain the approval will get squarely covered even as per the CBEC Circular. The distinction drawn by the lower authorities between statutory authorities within India and the statutory authorities outside India has no legal basis. We, therefore, respectfully following the decisions of this Tribunal in the case of Vidhi Dyestuff Mfg. Ltd. versus Raigad ; Roha Dyechem Pvt. Ltd. versus Commissioner of Central Excise, hold that no service tax was payable on the amounts which the appellants had paid to US FDA to obtain their approval for export of their drugs. 11. As we have found in favour of the appellant on merits itself, the submissions on the limitation and penalty need not be examined. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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