M\/s Fertin Pharma Research & Development India Pvt. Ltd. Versus Commissioner of CGST, Navi Mumbai
Service Tax
2018 (10) TMI 1373 – CESTAT MUMBAI – 2020 (38) G. S. T. L. 33 (Tri. – Mumbai)
CESTAT MUMBAI – AT
Dated:- 28-9-2018
Appeal No. ST\/86041 to 86045 & 86319\/2018 – A\/87552-87557\/2018
Service Tax
DR. D.M. MISRA, MEMBER (JUDICIAL)
\nShri D.H. Nadkarni, Advocate for Appellant
\nShri M.P. Damle, AC (AR) for Respondent
\nORDER
\nPer: Dr. D.M. Misra
\nThese appeals are filed against Order-in-Appeal No. MKK\/327-332\/RGD\/APP\/2017 dated 14.12.2017 passed by the Commissioner of Central Excise & Service Tax (Appeals), Raigad.
\n2. Briefly stated facts of the case are that the appellants have been registered for providing taxable output service under the category of “Technical Testing and Analysis Service\/Scientific and Technical Consultancy Service”. The appellant had claimed to have exported the said services to one M\/s Fertin Pharma, Denmark. The inputs\/raw materials on whi<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ch credit was availed do not fall within the scope of 'input service' as prescribed under Rule 2(l) of the CENVAT Credit Rules, 2004. Aggrieved by the said order, they filed appeal before the learned Commissioner (Appeals), who on the first count held that the research and development services provided by the appellant cannot be treated as an 'export service'; and on the issue of applicability of the definition of 'input service', he has observed that except in relation to two services, there has been nexus between the other input services and output services and accordingly the said services satisfied the definition as prescribed under Rule 2(l) of the CENVAT Credit Rules, 2004. Hence, the present appeals. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s. As per CBEC Guidance on service tax vide TRU Circular dated 20.6.2012, note 5 of clarifies that it is essential that to cover under Rule 4, the goods should temporarily come under the physical possession or control of the service provider and without such effect, the service cannot be termed as rendered in India. In the present case, since the goods have been purchased from their Denmark company, hence provision of Rule 4(a) of the Place of Provision of Services Rules, 2012 will not be applicable. Further, he has submitted that period from April, 2013 to June, 2013, in similar facts in their own case, this Tribunal decided the issue in their favour reported as Fertin Pharma Research & Development Pvt. Ltd. – 2017 (6) GST 475 (T). Also, this Tribunal in the case of Commissioner of Central Excise, Pune-I Vs. Sai Life Sciences Ltd. – 2016 (42) STR 882 (Tri- Mum)&Principal Commissioner of Central Excise, Pune-I Vs. Advinus Therapeutics Ltd. – 2017 (51) STR 296 (Tri-Mum) held that undert<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n f provisions of Service Rules, 2012 since the period involved in the said judgment relates to the period before 2005 and the matter was decided in favour of the assessee on the ground that export of service is always tax free. Therefore, the said ratio cannot be applicable after enactment of Place of Provisions of Service Rules, 2012. Further, he has submitted that judgment in Advinus Therapeutic's case, which was passed following the ratio in Sai Life Sciences Ltd. case, also cannot be considered to be a good law. The learned AR for the Revenue referred to the judgments of this Tribunal in support of their case namely, Crompton Greaves Ltd. – 2015-TIOL-2724-CESTAT-MUM, and Roha Dyechme Ltd. Vs. CCE, Raigad – 2017-TIOL-3448- CESTAT-MUM and submitted that The present facts are identical mirror image of the facts of the aforesaid judgments and hence, the services are since performed in India, therefore, Rule 6A of Service Tax rules, 1994 is not satisfied, consequently, the appellant are <\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ature of export service and hence eligible to cash refund of accumulated CENVAT Credit. Also, in the case of Advinus Therapeutics Ltd. (supra), this Tribunal more or less under similar circumstances discussing all aspects of the issue held that scientific or technical consultancy service provided for the development of drugs to the overseas recipient of service was held to be 'export service'. This Tribunal observed as follows: – = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on activities that would otherwise be performed by the recipient for itself. The new industry of hiving out or outsourcing of what was, conceivably, being done within the enterprise was intended to be subject to the new levy. In the matter of service rendered by respondent, this activity could, but for commercial viability, will be executed by the recipient within its own organization or the territory in which it exists. The satisfaction of the customer occurs upon an outcome 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t, is that any service that is obtained by a person who has a fixed place of business in India is liable to tax for services availed by him in a foreign country. By way of an example, learned Counsel for the petitioner has cited that if such a person in India goes abroad, and has a haircut, he would be liable to pay service tax in India on the basis of Section 66A of the Act. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ich would, by default, be predicated by the intent in Rule 3. Consequently, a recipient in India would be liable to tax on such temporary imports for repairs while service to a recipient located abroad would not be taxable. This is in consonance with the privilege of exemption afforded to export of services. The special and distinct role of Rule 4 becomes clearer. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Rule 4(1) are not attracted and, in terms of Rule 6A of Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the appellant to eligibility under Rule 5 of Cenvat Credit Rules, 2004.” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" M\/s Fertin Pharma Research & Development India Pvt. Ltd. Versus Commissioner of CGST, Navi MumbaiService Tax2018 (10) TMI 1373 – CESTAT MUMBAI – 2020 (38) G. S. T. L. 33 (Tri. – Mumbai)CESTAT MUMBAI – ATDated:- 28-9-2018Appeal No. ST\/86041 to 86045 & 86319\/2018 – A\/87552-87557\/2018Service TaxDR. D.M. MISRA, MEMBER (JUDICIAL) Shri D.H. Nadkarni, Advocate for … Continue reading “M\/s Fertin Pharma Research & Development India Pvt. Ltd. Versus Commissioner of CGST, Navi Mumbai”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-14685","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14685"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14685\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n3. The learned Advocate Shri D.H. Nadkarni for the appellant submits that they had provided services outside India in relation to technical testing and analysis service. It is his contention that as per clause (d) of Rule 6A of Service Tax Rules, 1994, the place of the provision of<\/p>\n
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\n“13. In the context of a catena of judgments and 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<\/p>\n
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\n14. In this context, <\/p>\n
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\n 5. We are not at all convinced by this argument of learned Counsel for the petitioner. The rules that 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.'
\nThe 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 jurisdict<\/p>\n
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\n16. Not intended to tax the activity of altering goods supplied by the recipient of service or for repairs on 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<\/p>\n
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\n8. I do not find merit in the contention of the learned AR for the revenue that the ratio laid down by the Hon'ble Bombay High Court in M\/s SGS India Ltd.'s case(supra) cannot be made applicable to the facts of the present case on the ground that in the 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 repor<\/p>\n
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