TaxTMI 
TaxTMI 
2020 (12) TMI 1013
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....mounts received by the appellant generally relating to sale proceeds of exports sale of finished goods; as well as sale of dossiers/licenses. It is alleged that the services provided by the foreign banks covered under the category of "Banking and other Financial Services" defined under Section 65(105)(zm) of the Finance Act, 1994 and accordingly service tax amounting to Rs. 45,02,307/- was demanded for the period 2006-07 to 2011-11. The appellants had received certain services from two foreign consultants namely, M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban. It is alleged that such services are covered under the taxable category of "Scientific or Technical Consultancy Services" defined under Section 65(92) of Finance Act, 1994 read with Section 65(105)(za0 of the Finance Act, 1994. Consequently, service tax amounting to Rs. 78,06,183/- was demanded with interest and penalty. On adjudication, both the demands of Rs. 45,02,307/- and Rs. 78,06,183/- were confirmed with interest and penalty. Hence, the present appeal. 3. Learned Advocate Shri S. Thirumalai with Mr. Harish Bindu Madhvan, Advocate for the appellants has submitted that on the issue of Service Tax demand relati....
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....A Consultancy and M/s Pharphe Dr. D.R. Iban for compilation of data on clinical overviews and non-clinical overviews, which are compiled on the basis of relevant published scientific literature as well as relevant parts of dossiers and information with regard to product composition, product impurity specification, analytical result during the stipulated test and impurity specification of the goods, substance including residual solvents. He has submitted that such written overviews are required to be enclosed as part of application to be filed before the Regulatory Authority in foreign countries for marketing their pharmaceutical manufactured products marketable in the European Union. M/s Dada Consultancy and M/s Pharphe Dr. D.R. Iban provide the services which are in nature of overviews and do not involve application of pure sciences for conducting research on samples of pharmaceutical products. Such services are not used for any scientific or development purposes but to meet the regulatory objective of the European Union in marketing their products. Further, he has submitted that M/s Dada Consultancy is not a Technology or Scientific organization but is a consultant firm engaged i....
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....g to payment of Service Tax under reverse charge mechanism for payments made to M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban were raised and the appellants filed their written reply from time to time clarifying their stand. Also, opinion of the Consultant obtained by the appellant on the said issue had been submitted along with their reply to the Audit queries. Therefore, there is no suppression of facts by the appellants; they have started discharging duty on such consultancy charges w.e.f. 1.6.2007 on receiving the said services from the foreign service-provider namely, M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban. In support, he has referred to the judgment of Hon'ble Supreme Court in the case of CCE Vs. Chempher Drugs and Liniments - 1989 (40) ELT 276 (SC), Padmini Products Vs. CCE - 1989 (43) ELT 195 (SC), Pushpam Pharmaceuticals Company Vs. CCE, Bombay - 1995 (78) ELT 401 (SC), Anand Nishikawa Co. Ltd. Vs. CCE, Meerut - 2005 (188) ELT 149 (SC). 6. Learned Advocate has further submitted that no mala fide intention can be attributed for not discharging Service Tax payable on the consultancy charges paid to M/s DADA Consultancy and M/s Pharphe Dr. D.R. Iban....
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....ppeal, this Tribunal reiterated the same principles as expressed while disposing the stay application. Therefore, following the principles laid down in Green Ply Industries Ltd.'s case and also in the case of Raj petro (supra) in identical facts and circumstances, we do not find merit in confirming the Service Tax demand for the charges deducted by the foreign banks under the category of "Banking and other Financial Services". Thus, the demand on this count is liable to be set aside. 13. The next issue relates to payment of Service Tax on the consultancy charges paid to M/s DADA Consultants and M/s Pharphe Dr. D.R. Iban for compiling clinical and non clinical overviews. The contention of the learned Advocate is that the said clinical and non-clinical overviews was compiled on the basis of relevant published scientific literature as well as on relevant parts of the dossier and information with regard to the product, such as product composition, product impurity specification and analytical result during the stability testing, impurity specification of the active substance including residual solvent. Such written overviews are required to be enclosed as part of the application to ....
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....activities come within the areas of 'Research in Social Sciences' which in our view would not fall within the purview of 'Scientific and Technical Consultancy'. Whereas when we go through the definition of 'Scientific and Technical Consultancy' let us reproduce it again : "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 technocrat, or any science or technology institution or organization, to a client, in one or more disciplines of science or technology; Section 65(105)(za) of the Act defines the taxable service as follows : 65(105) taxable service means any service provided or to be provided .......... (za) to a client by a scientist or a technocrat, or any science or technology institution or organization, in relation to scientific or technical consultancy. 14. It is very clear that in order to assert that an organization is providing scientific or technical consultancy, two basic ingredients have to be established. The organization must be a science or technology institution. The consultancy must....