2026 (1) TMI 1524

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.... that the appellants are Research and Development organization and are, inter alia, engaged in testing of bulk drugs and formulations for testing stability, valuation of physio-chemical parameters, etc., for domestic and overseas clients as also bio-equivalence and bio-availability (BE/BA) studies. The present appeal covers the issue relating to leviability of service tax on BE/BA studies provided to overseas clients. The department felt that the said service provided to overseas clients were classifiable under 'Technical Testing and Analysis Service' (TTAS) as defined in section 65(106) of the Finance Act, 1994 read with section 65(105)(zzh). Further, they felt that since the said service would fall under Rule 3(1)(ii) of Export of Service....

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....s export of service as the same fall under Rule 3(1)(ii) of the Rules, as it fulfills the conditions stipulated in Rule 3(2). He has also taken us through various amendments brought in respect of Rule 3(2) vide various notifications through the period 03.03.2005 till 27.02.2010 and that for the period in question, the appellants satisfied the condition of Rule 3(2) of the Rules. He has also relied on the following judgments. a) CST, Ahmedabad Vs BA Research India Ltd [2010 (18) STR 439 (Tri-Ahmd)] b) SGS India Pvt Ltd Vs CST, Mumbai-II [2011 (2) TMI 54 - CESTAT Mumbai], which was upheld by Hon'ble Bombay High Court as reported in [2014 (5) TMI 105 (Bom)] 5. He has also relied on the following Circulars. a) 141/....

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....ng validated statistical and other tools to find out whether the tested drug and the reference drug are bioequivalent or not. Admittedly, this comparative study has been done in the test facility of the appellant in India. On going through the details, we find that there is no infirmity in the order holding that the activity would fall under the category of TTAS, however, as regards the other ground to treat the said provision of service to their foreign client as export of service, we find that they have submitted various reports/ data/ scientific observations and in some cases, even the products produced under pilot projects to their clients situated abroad. Even it has been acknowledged by the adjudicating authority that the data is made....

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.... the service should accrue outside India'. We find that these services were commissioned by the clients abroad for its utilization abroad and therefore, it has been effectively used and enjoyed outside India. Thus, in terms of Rule 3(2) of the Rules, the taxable service has to be treated as export of service, if such service is provided from India and used outside India. Therefore, the term 'used outside India' has to be interpreted to mean that the benefit of service should accrue outside India even when all the relevant activities have taken place in India, so long as the benefit of these services accrues outside India. 11. Insofar as submission of learned AR that post 2008 amendment, the goods have to be located outside India to be tr....