Fertin Pharma Research & Development Versus Commissioner of CGST, Navi Mumbai
Service Tax
2019 (1) TMI 1043 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 18-1-2019
APPEAL NO: ST/87376/2018 – A/85131/2019
Service Tax
Shri Ajay Sharma, Member (Judicial)
Appellant: Shri D.H. Nadkarni, Advocate
Respondent: Shri S.B. Mane, Assistant Commissioner (A.R.)
ORDER
The present appeal has been filed from the impugned order dated 18.04.2018 passed by the Commissioner of Central Tax (Appeals), Raigad, by which the ld. Commissioner rejected the appeal filed by the appellant and held that technical testing and analysis services provided by the appellant cannot be termed as export of service and therefore refund claim of unutilized Cenvat credit of Rs. 4,31,384/- under Rule 5 of CCR, utilized in respect of this service for the period from January 2016 to March 2016 is not admissible.
2. The brief facts of the Appeal are that the Appellant is engaged in the activity of res
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ule 5 of Cenvat Credit Rules, 2004 for Rs. 4,31,384/-, but the same was rejected by both the authorities below on the ground that technical testing and analysis services provided by the Appellant cannot be termed as export of service.
3. The Learned Authorised Representative on behalf of revenue reiterated the findings recorded in the impugned order and prayed for dismissal of the appeal filed by the appellant. The ld. Counsel appearing for the Appellants submitted that in Appellants' own case on similar facts, for the period from April, 2013 to June, 2013 this Tribunal has allowed the Appeal filed by the Appellant, which is tilted as M/s Fertin Pharma Research & Development vs. Commissioner of S.T., Mumbai-VII reported in 2017(6) GST 475(T). I have gone through the same and find the same to be on the identical issue. The relevant extract of the said decision is as under:
” xxx
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3. After careful consideration of the facts of the case and the submissions of both sides, it ap
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also i.e. from January, 2014 to December, 2015 this Tribunal in another decision in Appellants' own case involving identical issue vide order no. A/87552-87557/2018 dated 28.09.2018, titled as Fertin Pharma Research & Development Pvt. Ltd. vs Commissioner of CGST, Navi Mumbai decided the issue in favour of the Appellant. He also produced the copy of the said order for my perusal. While going through the same, I find that the aforesaid decision also squarely covers the issue involved in the present appeal. The relevant extract of the said order is as under:
” xxx
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6. Heard both sides and perused the records. Undisputedly, the appellant had purchased the goods from the overseas company, on which they discharged appropriate customs duty on its import into India. Necessary tests are carried out by them on the said goods in India and after analysis the relevant report was submitted to the overseas Denmark company. In the process of providing the said output service, that is, “Te
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nd decisions that exports are not taxable and, with the most palpable manifestation of export of invisibles being the receipt of convertible foreign exchange from a recipient of service located outside the country, that services are taxable at the destination, the scope of Rule 4 must necessarily be scrutinized to ascertain if there was, indeed, legislative intent to deny acknowledgement as exporter to a certain category of service providers that were so privileged tell them. There is no dispute that the recipient of service is located outside India and that the consideration is received in foreign convertible currency. Yet, Revenue insists that performance of service is in India. A service is not necessarily a single, discrete, identifiable activity; on the contrary, it is a series of invisibles that cater to the needs of a recipient; it is upon the consumption of the service by the recipient that service is deemed to have become taxable. This has been so held by the Hon'ble Supreme C
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e which is possessed by the recipient. Hence, even if some of the activities are carried out in India, by no stretch can it be asserted that the fulfilment of the activity is in India. Therefore, the inescapable conclusion is that the location of the actual performance of the service is outside India and, even with the special and specific provision of Rule 4 of Place of Provision of Services Rules, 2012, the performance of service being rendered outside India would render it to be an export.
14. In this context, the legislative intent of incorporating a special and specific provision in Rule 4 may yield further insights. The special provision, which may be seen as an exception to the general Rule 3, deals with services in respect of goods as well as those provided to individuals. Not unnaturally, the services that require the physical presence of the person is taxed where the consumer receives the service and not at his location which as per Rule 2(i)(iv) would be his usual place of
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hat have been framed by the Central Government make it absolutely clear that taxable service provided from outside India is liable to service-tax. In the example given by the learned Counsel for the petitioner, there is no question on the service of haircut having been received in India.'
The intent in Rule 4 to remedy out some specific situations that would, otherwise, have enabled escapement from tax or leviability to tax where Rule 3 of Place of Provision of Services Rules, 2012 may not serve to confer jurisdiction becomes increasingly obvious.
15.Accordingly, we can infer that the location of performance of service in respect of goods is not an abstract, absolute expression for fastening tax liability on services that involve goods in some way; for that, Rule 3 would have sufficed. A contingency that is not amenable to Rule 3 has been foreseen and remedied by Rule 4 and in the process, the sovereign jurisdiction to tax is asseted. It is, therefore, not by the specific word or p
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n goods, Rule 4(1) of Place of Provision of Services Rules, 2012 would appear, by elimination of possibilities, to relate to goods that require some activity to be performed without altering its form. The exemplification in the Education Guide referred supra renders it pellucid. Certification is an important facet of trade and such certification, if undertaken in India, will not be able to escape tax by reference to location of the entity which entrusted the activity to the service provider in India. This is merely one situation but it should suffice for us to enunciate that Rule 4(1) is intended to resorted when services are rendered on goods without altering its form that in which it was made available to the service provider. This is the harmonious construct that can be placed on the applicability of Rule 4 in the context of tax on services and the general principle that taxes are not exported with services or goods.
17. The goods supplied to the respondent, minor though the propo
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said case, the Place of Provision of Service Rules,2012 was not considered. This Tribunal while interpreting the provisions of new Rules, that is, Place of Provision of Service Rules, 2012 followed the ratio laid down in the said case in reiterating the basic principle of levy of service tax and observed that it is a consumption-based levy, accordingly, the technical and consultancy service, commences from the stage of undertaking the test on the goods procured and the service is completed on delivery of the test report/certificate to the overseas client. I do not find any reason to deviate from the aforesaid observation of this Tribunal. Further, the judgements referred by the learned A.R for the revenue, in my opinion, are not relevant to the facts of the present case, inasmuch as in the said judgement the issue raised was levy of service tax on procurement of FDA certificate for the goods to be sold in the respective country. In the result, following the aforesaid precedent, I do n
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