At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: S.S. GARG
By, MEMBER AND THE HONORBLE JUSTICE: C.J. MATHEW
For Petitioner: V.R. Reddy, Asst. Commr (AR)
1. The present appeal of Revenue is directed against the impugned order dated 20th December 2013 whereby the Commissioner (Appeals) has allowed the appeal of the assessee by setting aside the order-in-original.
2. Briefly stated the facts of the case are that the appellants are holders of Central Excise registration certificate No. AABCK1455BXM001 for manufacture of excisable goods viz. Bulk Drugs falling under Chapter 29 of the Central Excise Tariff Act, 1985. During the scrutiny of the appellants documents the Central Excise Officers observed that the appellants had supplied the Drug Master File (DMF)/Technical Package (TECHPACK) to various customers and recovered on data / information about the goods such as size, bulk density, crystalline form, customers to study the manufacturing and testing procedures in respect of the goods of the appellants. It appeared that the said activity was covered under the Finance Act, 1994 (hereinafter referred to as the Act) and therefore the Notice dated 23.03.2012 issued to the appellants was decided vide impugned order dated 05.11.2012 wherein service tax of Rs. 9,50,378/- was confirmed along with interest under Section 75 and penalty was also imposed under Section 76 of the Act.
3. Aggrieved by the order-in-original, appellant has filed an appeal before the Commissioner (Appeals) on various grounds including the ground that the appellants are manufacturer of excisable goods and not any Scientist or Technocrat or any science or technology institutes and hence they cannot be treated as provider of scientific or technical consultancy service. Commissioner (Appeals) after considering the submission of the assessee allowed the appeal of the assessee. Hence the present appeal by the Revenue.
4. Heard Learned A.R. for the Revenue. None appeared on behalf of the respondent-assessee. Since the issue is in a narrow compass, therefore we proceed to decide the issue on the basis of the materials available on record.
5. Learned A.R. submits that the impugned order is not sustainable in law as the same has been passed without appreciating the facts. He further submits that the assessee has rendered the services of technical assistance relating to manufacture / testing of drugs to their customers who have paid money to obtain these DMF/TECHPACK. He further submits that the customers of the assessee have invested huge sums in purchase of the DMF/TECHPACK which is nothing but information / data relating to the manufacture of bulk drugs or pharmaceutical or any other products provided as per the customer's specification. He also submits that DMF/TECHPACK is nothing but technical assistance in the field of pharmaceutical products.
6. After considering the submission of the learned A.R., perusal of materials on record and the grounds of appeal, we find that there is no infirmity in the impugned order. We also find that the activities of the assessee do not fall under the provisions of Service Tax. The assessee is manufacturer of excisable goods and they are not Scientist or Technocrat or any science or technology institute. Therefore, the service rendered by them cannot be treated as provider of scientific or technical consultancy. Further we find Revenue has misinterpreted the statutory definition as provided under section 65(92) of the Act which is reproduced as below for the purpose of appreciation.
Scientific or Technical Consultancy means any advice, consultancy or scientific or technical assistance, rendered in any manner, either directly or indirectly, by a scientist or a technocraft, or any science or technology institution or organization to a client, in one or more disciplines of science or technology.
Further section 65(105)(za) of the Act defines the taxable service for Scientific or Technical Consultancy as follows:-
taxable service means any service provided or to be provided to any person, by a scientist or a technocrat, or any science or technology institution or organization, in relation to scientific or technical consultancy.
7. Further, we find that the Commissioner (Appeals) while allowing the assessee's appeal has relied upon the following decisions of this Tribunal:-
(a) Steel Cast Ltd. v. Commissioner of Central Excise Bhavnagar 2009 (14) STR 129 (Tri-Ahmd).
(b) Administrative Staff College of India v. CC & CE, Hyderabad : 2009 (14) STR 341
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(Tri-Bang). 7.1 After considering the submission of the learned A.R. and on perusal of the impugned order we find that the impugned order has been passed after considering various decisions of the Tribunal cited supra and also has considered the definition of Scientific or Technical Consultancy service as defined under section 65(92) of the Finance Act, 1994. Therefore, we do not find any infirmity in the impugned order and the same is upheld by dismissing the appeal of the Revenue.