Order date: 04 October 2022

Fact 

• The appellant, Roche Products (India) Pvt Ltd, had supplied goods to their holding company M/s F Hoffmann-La Roche AG (FHLR) based in Switzerland.
• The refund of the accumulated Cenvat credit arose from the said activity within rule 4 of Place of Provision of Services Rules, 2012 was denied by the authority on the assumption that they had themselves conducted ‘clinical trials’ on goods supplied.
• Revenue contended that in the agreements of the appellant with other entities in India, the definition of ‘clinical trials’ in their respective agreements requires supply of the formulation and drugs implying that rule 4 of Place of Provision of Services Rules, 2012 had been correctly invoked. 

Issue

• Whether the denial of refund of the accumulated Cenvat credit arose from the presumption of taxability of the clinical trials on goods supplied within rule 4 of Place of Provision of Services Rules, 2012?

Order

• The Tribunal observed that no demand has been raised in relation to the alleged ‘taxable service’ owing to which the present claim for refund has been denied for not being export within the meaning of rule 6A of Service Tax Rules, 1994. It is only by raising such demand that taxability can be asserted and exports held as not having taken place.
• Further Rule 4 of Place of Provision of Services Rules, 2012 is a deviation from the default principle set out in rule 3 of Place of Provision of Services Rules, 2012. Providing of goods upon which service can be rendered is essential to invoking of rule 4 of Place of Provision of Services Rules, 2012. No records are available of such having been done and there is also no reference in the show cause notice to such.
• It was further held that contention of Revenue that the agreements should be subject to a fresh consideration by the original authority which amounts to permitting the scope of the show cause notice to be expanded.
• Accordingly, the refund application is restored to the original authority for proceeding in accordance with the provisions of the said notification on the finding that it is rule 3 of Place of Provision of Services Rules, 2012 which applies.
•  Appeal is, accordingly, disposed of.