Custom, Excise & Service Tax Tribunal
Aurobindo Pharma Limited vs Commissioner Of Central Excise, ... on 19 January, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/61/2007-SM [Arising out of Order-In-Appeal No 5/2006 dated 28/09/2006 passed by the Commissioner of Customs & Central Excise (Appeals-I), Hyderabad.] For approval and signature: HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes AUROBINDO PHARMA LIMITED PLOT NO.2, MAITRIVIHAR, AMEERPET, HYDERABAD. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax HYDERABAD-I KENDRIYA SHULK BHAVAN, L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD, - 500004 ANDHRA PRADESH Respondent(s)
Appearance:
Mr. Harish Bindumadhavan 100/2, Richmond Road, Bangalore 560 025. Mr. Mohd. Yusuf, Addl. Commissioner (AR) For the Appellant For the Respondent Date of Hearing: 19/01/2015 Date of Decision: 19/01/2015 CORAM:
HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 20110 / 2015 Per : B.S.V.MURTHY Statement of facts as submitted by the appellants is very detailed and therefore the same is reproduced.
i. The appellants had entered into an Investigation Agreement dated 29.4.2004 with M/s. Algorithme Pharma Inc. (ALOG), Laval, Quebe, Canada in terms of which the appellants had retained ALOG as a provider of Single Dose Bio-availability Study of amoxicillin 875 mg capsules in healthy male and female volunteers/Fasting State. The fees agreed and to be paid for the said service is 95,380 CDN (Canadian) dollars.
ii. For this purpose, Amoxicillin manufactured and packaged by the appellants hereinafter also called APL would be supplied to ALOG. Four types of services were rendered by ALOG to APL (i) General services as per the protocol supplied by APL (ii) Clinical services (iii) Bio-analytical services through Pracs Institute (iv) Storage services of the inventory of drug received from APL and other free samples.
iii. The appellants where registered under the head Management Consultants with the Hyderabad-II Commissionerate of Central Excise and Customs, Basheerbagh, Hyderabad for the payment of service tax.
iv. Hyderabad-I Commissionerate issued a summons notice dated 24.9.2004 with regard to the case of evasion of service tax on Technical Testing and Analysis. In order to comply with the demand for payment of service tax by Hyderabad-I Commissionerate, the appellants paid an amount of Rs.37,81,702/- into the account of Hyderabad-I Commissionerate for the period 2003-2004 & 2004-2005 which included a. Service tax for an amount of Rs.32,42,003/- on an amount of Rs.4,05,25,035/- paid to ALOG under the category of Technical Inspection & Certification.
b. Service tax for an amount of Rs.5,39,699.68 on an amount of Rs.67,46,246/- paid to Lachman Consultant Services, Inc, New York.
v. Since the amount of Rs.32,42,003/- was inadvertently and erroneously paid by way of service tax to the account of Hyderabad-I Commissionerate, the appellants applied for a refund on 8.2.2005 vide refund application dated 4.2.2005.
vi. This was followed by show-cause notice (SCN) C. No.V/29/18/14/2005-R dated 6.6.2005 from the Department wherein the Department stated that the services provided by ALOG to appellants fell under Technical Testing & Analysis and as such are liable to service tax. Hence the SCN asked the appellants to show cause as to why the claim for refund claim for Rs.32,42,003/- should not be rejected.
vii. The appellants replied to the SCN through its reply dated 14.7.2005 stating that as per Section 65 (106) of the Finance Act, 1994, Technical Testing & Analysis excluded any testing or analysis service provided in relation to human beings or animals and as the services provided by ALOG to the appellants were in relation to testing on human beings, it should stand excluded from the purview of service tax.
viii. Appellants had also received SCN O.R. No.17/2005 ST (Adjn.) dated 19.12.2005 from the Hyderabad-II Commissionerate stating that the services provided by ALOG to the appellants fell under the service category Scientific or Technical Consultancy Services. The appellants replied to this SCN through their reply dated 23.2.2006. Apart from other submissions, the appellant also submitted that two show cause notices cannot be issued in the same matter and in this respect submitted a catena of decisions in support of the said stance.
ix. The refund claim of the appellants was rejected vide Order-in-Original No.14/2006 dated 31.3.2006 issued by the Assistant Commissioner of Central Excise, Hyderabad-C Division, Hyderabad-I Commissionerate.
x. The appellants filed an appeal with the Commissioner (Appeals) against the decision in Order-in-Original No.14/2006 dated 31.3.2006.
xi. The Commissioner of Customs & Central Excise (Appeals-I) through his Order-in-Appeal No.5/2006 (H-I) S. Tax dated 28.9.2006 had held that show-cause notice proposed to reject the refund claim by treating the said services as taxable under the category of Technical Testing and Analysis Services whereas the said impugned order held that they fell under Scientific or Technical Consultancy Service which was not mentioned in the SCN at all and thus traveled beyond the scope of the SCN. The Commissioner (Appeals) remanded the matter back to the adjudicating authority on the ground that the Order-in-Original No.14/2006 dated 31.3.2006 was a non-speaking order.
xii. The appellants filed written brief dated 29.11.2006 before the Additional commissioner of Central Excise, Hyderabad-II Commissionerate in connection with the said proceedings pending before the Commissionerate.
xiii. Aggrieved by the Order of the Commissioner (Appeals-I) in Order-in-Appeal No.5/2006 (H-I) S. Tax dated 28.9.2006, the appellants are filing the present appeal.
2. Heard the learned counsel. In this case, the period involved is prior to 18.4.2006 and as per the decision of the Honble High Court of Bombay in the case of Indian National Shipowners Association: 2009 (13) S.T.R. 234 (Bom.) service tax cannot be collected from the receipt of service in India in respect of services received from abroad prior to 18.4.2006. In this case, the period involved is September 2003 to March 2005, thus the entire period is prior to the date on which service tax was required to be paid. Moreover, the show-cause notice proposed demand under one service category whereas confirmation was under another category. Therefore, I find that the appellant is eligible for the refund of tax which was paid by them and it was not required to be paid. I was informed that the remand order has not yet been implemented by the original adjudicating authority. Therefore, the original adjudicating authority is requested to proceed further in the light of observations made hereinabove and decide the matter afresh.
(Operative portion of the Order was pronounced in open court) B.S.V.MURTHY TECHNICAL MEMBER rv