TaxTMI 
TaxTMI 
2017 (7) TMI 62
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....57/2014-CU[DB] 17/10/2011 April 2010 to March 2011 19,40,809 19,40,809 (Section 76) + 10,000 (Section 77) Order-in-Appeal No. NOI/EXCUS/000/APPL/194-195/2013-14 3. ST/52065/2014-CU[DB] (Department Appeal) 17/10/2011 April 2010 to March 2011 Not quantified Not quantified Order-in-Appeal No. NOI/EXCUS/000/APPL/194-195/2013-14 2. The brief facts are that Jubilant Chemsys Ltd. are registered with the service tax Department for providing services namely 'online information and data retrieval service', business auxiliary service, scientific and technical consultancy service and transportation of goods by road. They are engaged in the research and development of drug chemicals and export thereof under the hundred percent EOU scheme. The appellant have been granted permission for carrying out manufacturing operations in a bonded warehouse under the Customs Act and also registered under the Central Excise Act as a manufacturer. The present appeals by the assessee have been filed against the orders passed by the Commissioner, Customs, Central Excise and Service Tax, Noida demanding service tax under Section 73 to the Finance Act, 1994 and also imposed p....
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....me during the period is from sale of residue and interest on the Income Tax refund. As per note number 7 to the accounts forming part of the balance-sheet. It is mentioned: - Quantitative Details: the company is primarily engaged in the medicinal chemistry business, the sale and production of such services cannot be expressed in any generic unit, hence it is not possible to give the quantitative details of sales and certain information as required under paragraph 3, 4C and 4B of part two of schedule 6 to the Companies Act. From the above it appeared that the compounds generated during the process of R & D undertaken by the assessee are secondary or only ancillary to the principal activity of the said medicinal chemistry services. The copy of approval/renewal letter issued by Department of Scientific and Industrial Research in the Ministry of Science and Technology, Government of India, states that the appellant company is registered as R & D Centre and is involved in research and development. Further, in their application for setting up EOU submitted to the SEZ, the assessee have not declared any item or capacity for production. Further, in the column VI of the said form, the qu....
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....roducts as 'chemical compounds, chemical compounds, chemical libraries, scaffolds. analogue and or lead compounds, intermediate combichem libraries, proteins and protein structures, protein crystals, co-crystals, biological assay and screening data and analytical data for all the above'. The words used at the end i.e. 'for all above' show that the party was providing the services namely 'Drug Discovery services' to their customers for which various other related products were also mentioned in the said approval. A study of the related products as above shows that the same are normally required for conducting research and development activity in the sphere i.e. 'Drug Discovery services' in which the party was engaged. It appears that the party is rendering its services to M/s. Jubilant Biosys Bangalore in accordance with the terms and conditions mentioned in the Master Agreement dated 26.06.2005 (RUD 7) executed between the said parties viz. M/s Jubilant Biosys Bangalore and M/s Jubilant Chemisys, Noida. Scrutiny of said Master Agreement reveals that the party is "engaged in the business of supplying chemistry services to synthesize, improve ....
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....e agreement. It appeared that the appellant is engaged in carrying out Research and Development services in relation to the chemical processes. It further appeared that whatever results are obtained by the appellant assessee as a result of the research/synthesis, the same are to become the property of the customer, namely, JBL. The compounds research/synthesis are a part of the and are only ancillary as the same represent the proof of the results/outcome of the synthesis conducted. Agreement further shows that JBL are engaged in pharmaceutical research and desire to utilise the services of appellant JCL to synthesize, improve synthetic processes, manufacture and/or supply synthetic organic compounds for JBL. 6. Further scrutiny of purchase orders placed by JBL, Bangalore, in accordance with the aforementioned master agreement shows that the purchase orders contain the details of services and price at which the appellant would render to JBL. Under the head price, the purchase order dated 30.01.2006 "as consideration for the services described in this order, Jubilant Biosys shall pay JCL US dollar 375000." Other purchase order also carry similar information. Thus, these orders als....
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....hat, I have gone through the ARE- 1 dated 26/04/2007, vide which 1.460g of Non Haz Lab Chemicals have been exported and value shown in the invoices is notional, USD 419.51. With respect to ARE-I dated 27/01/2006, vide which 5.74g of lab, chemicals have been exported. value is USD 445 only. As for the relation concerned the payment is through Biosys for which separate invoices are raised the of Biosys and the amount so billed was duly realized from them. 7. Ongoing through the company's website, namely "www.jchemsys.com", the home page of the website describes about the various activities carried out at the premises of the appellant, such as collaborative research, development and manufacturing partnerships with pharmaceutical companies. Further on being asked about the profile of the technical personnel deployed by the appellant company for the purpose of research, it was stated that the basic qualification of the persons employed in their facility is MSc (organic chemistry). However, the scientist employed in their organisation have Ph.D. from the premier institutes in India and abroad. Further, from the documents namely orders received by JBL from the customers relating to....
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....aid master agreement are for manufacture and supply of compounds and no services have been rendered and all thepayments have been received against supply of compounds. In support of their claim they have stated that Clause 1 of the agreement between the appellant JCL and the JBL stipulates appellant shall conduct chemistry and analytical services for JBL. That the compound to be supplied and quantity and purity of each compound, price, time frame, delivery date etc.., will be as per terms of the agreement and (ii) That the services provided by them to JBL is not liable to service tax as the actively involved amounts to manufacture and the same is excluded from the purview of service tax. 9. The aforementioned contentions of the appellant were not tenable to the Revenue in view of the fact that JCL have not raised any invoice charging the value of goods said to have been supplied by them. After conducting the necessary research and Development as per the requirement of JBL, Bangalore appellant issued invoices for clearance of the sample of the compounds obtained after the research work. But only notional value, and not the actual value, thereof is being shown in the said invoi....
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.... in October, 2009. It is further mentioned in the SCN of ST-3 returns shows that there has all by the appellant to conceal the material facts of provision taxable service as the entire amount of receipts against said services under the category of scientific or technical consultancy was claimed as exempt under export of service. Thus, there has been misrepresentation of facts as they never disclosed the said facts on their own, in any manner. On similar charges show cause for other period was also issued, as more fully described hereinabove. 11. The SCN's adjudicated on contest and vide impugned order in original, the demand was confirmed on the ground that the appellant have done the work in the nature of a sub-contractor or agent of JBL and have actually not exported their services. The service tax have been demanded based on the amount incorporated in the auditor's report annexed with annual accounts of the appellant for the period 2005-06 to 2008-09 and from the quarterly progress reports (QPR) submitted to the Development Commissioner for the financial year 2009-10. The value of the services included in the SCN was not based on the invoices for the services rendered....
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....he authority to act on their behalf in connection with matters related to this agreement. The learned counsel further submits that this agreement have been entered into in terms of the master agreement dated 26 June, 2005, which is entered into between three jubilant companies namely, Jubilant Chemsys Ltd and Jubilant Bios. Ltd and Jubilant Organosys Ltd provides that with the terms of this agreement, the company JCL shall conduct chemistry and analytical services for JBL utilising company full-time equivalent employees, including but not limited to synthesise. improve synthetic process, manufacture and or supply synthetic organic compounds or class of compounds and chemical analysis support for JBL in accordance with an order agreed to by the parties in writing, which shall specify the process to be improved. It further provides that JCL shall consult JBL regarding all methods reagents, protocols and the like and Jubilant Biosys shall have final approval authority over all aspects of the services. So far price for the services concerned and it is provided as concession for JCL conducting the services hereunder, JCL shall perform the services for JBL at a price mutually agreed upon....
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....Account. JBL was operating and managing the amount in its EEFC account as a trustee, being the lead venture under the aforementioned agreements. Thus, under the facts and circumstances, the appellant have exported their services as they have provided services to clients situated outside India like Eli Lilly & Co. CSA and have received payment directly from the foreign client through the EEFC account, operated by JBL as the lead 'Sin convertible foreign exchange". Thus, the appellants have satisfied both the conditions under the Export of service Rules and accordingly the impugned order is not sustainable and fit to be set aside. The findings of the learned Commissioner are erroneous and based on a wrong appreciation of the facts, so far the learned Commissioner held that the appellant have rendered services as a subcontractor of JBL and received payment from JBL only. This fact is prima facie controverted by the fact that the appellant have also paid their share of expenses, as a co-venture, to JBL for maintenance of infrastructure and/or common services and facilities which payment is reflected in their books of accounts and balance sheets and the same have also been wrongly c....
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....e Ltd, 2010 (256) ELT 369, also on the issue of suppression and misrepresentation; It was held that once it is found that the ingredients of the proviso to Section 11 A(1) are satisfied, all that has to be seen as to what is the relevant date and as to whether the show cause notice have been served within a period of five-year therefrom. By no stretch of imagination, the concept of knowledge can be read into the provisions. Reliance is also placed on the co-ordinate bench ruling of this Tribunal in 'English v/s CCE', 2017 (47) STR 357 whereunder the fact that the assessee did not file the facts and figures which are necessary for issuing the SCN and was suppressing information without which formal SCN could not have been issued. Admittedly there had been letters issued by Department itself and letter notifying the appellant that Tax liability would arise. The fact that appellant or assessee succeeded in not giving required information for quantifying the tax liability cannot be a reason to plead that demand is time barred. 15. Having considered the rival contentions, we are satisfied that the appellant is not a subcontractor, but a co-venture along with JBL in executing the rese....