The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the stability studies and technical testing and analysis of new drugs are not classifiable under the taxable category of “Scientific and Technical Consultant Service” and “Technical Testing and Analysis Service” for the purpose of levy of service tax under the provisions of the Finance Act, 1994.
The appellants M/s. Apotex Research Pvt. Ltd. have two 100% EOU units registered and have obtained service tax registration. One unit of the appellant is engaged in manufacture and export of pharmaceutical products and the other unit is engaged in rendering Research and Development services. The department was of the view that the the stability studies and technical testing and analysis of new drugs were classifiable under the taxable category of “Scientific and Technical Consultant Service” and “Technical Testing and Analysis Service”.
Revenue also opined that various services like procurement of raw materials and packaging materials; development of analytical method; innovator/ competitor sample analysis; prototype formulation development; product specification development; exhibit batch manufacturing; stability study and data generation; bioequivalence study and data generation; compilation of data and dossier preparation and submission to various regulatory agencies to obtain approval; commercial batch manufacturing, analysis and packing and export of finished goods.
The counsel for the appellant, Shri Vedhagiri N.C contended that the issue is no longer res integra as the department themselves in subsequent proceedings decided the issue in their favour.
The Tribunal bench comprising Shri, S.K. Mohanty, Judicial Member and Shri P.Anjani Kumar, Technical Member observe that the Tribunal, in the case of the appellants themselves have decided the very same issue in favour of the appellants vide Final Order No. A/20003/2022 dated 04/01/2022.
Holding in favour of the assessee, the Tribunal held that “Heard both sides and perused the records of the case. As submitted by the learned counsel for the appellants, the issue stands settled in favour of the appellants by this Bench vide Final Order cited above. In view of the same, we find that the impugned order is not sustainable and thus, liable to be set aside. We do so and allow the appeals with consequential relief, if any, as per law.”
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