By TIOL News Service

AHMEDABAD, OCT 30, 2018: THE appellant is registered for providing taxable output service of "Technical Testing and Analysis Service/Scientific and Technical Consultancy Service".

The facts of the case are -

Inputs/raw materials were purchased by the appellant from their parent company against valid consideration and imported into India on payment of appropriate customs duty.

Appellant undertook research activity on the said goods and exported the services viz. "Technical Testing and Analysis Service/Scientific and Technical Consultancy Service" against convertible foreign exchange.

The accumulated CENVAT Credit on various input services used in providing the output taxable services was claimed as refund u/r 5 of the CCR, 2004.

The adjudicating authority rejected the refund claims on the ground that the services provided by the appellant to their overseas customer cannot be considered as an 'export service' and secondly the input services on which credit was availed do not fall within the scope of 'input service' as prescribed under Rule 2(l) of the CCR, 2004.

The Commissioner (A) held that the services cannot be treated as 'export services'. However, on the issue of coverage of Input service u/r 2(l) of CCR, 2004, except in relation to two services viz. Building Maintenance Service and rent-a-cab service, the others satisfied the nexus test, the lower appellate authority held.

The appellant is before the CESTAT and justifies their entitlement for refund by relying on the decision in their own case cited as - 2017-TIOL-2919-CESTAT-MUMand also of Sai Life Sciences Ltd. - 2016-TIOL-433-CESTAT-MUM& Advinus Therapeutics Ltd. - 2016-TIOL-3188-CESTAT-MUM.

The AR relied on the decisions in Crompton Greaves Ltd. - 2015-TIOL-2724-CESTAT-MUM, and Roha Dyechem Ltd. - 2017-TIOL-3448-CESTAT-MUM which, according to the AR, mirrored the facts involved in the present case and, therefore, the appellants are not eligible for cash refund of the accumulated cenvat credit.

The Bench considered the submissions and observed that in the appellant's own case the Tribunal had already taken a view that the services rendered by the appellant are in the nature of export service and hence eligible for cash refund of accumulated CENVAT Credit. Moreover, in the case of Advinus Therapeutics Ltd. (supra) , in more or less under similar circumstances, the Bench had held that scientific or technical consultancy service provided, for the development of drugs, to the overseas recipient of service is an 'export service'.

After extracting passages from the Tribunal decision in Advinus Therapeutics Ltd. (supra), the Bench observed that the case laws cited by the AR were distinguishable and further observed that there was no merit in the impugned order to the extent of holding that the services provided by the appellant are not export services under Rule 6A of Service Tax Rules, 1994.

Nonetheless, the Bench observed that the appellant was eligible for cash refund of accumulated CENVAT credit except in relation to credit availed on the two input services which were denied by the Commissioner (Appeals).

For computation of the admissible refund, the matter was remanded to the adjudicating authority.

The appeals were disposed of.

(See 2018-TIOL-3281-CESTAT-MUM)