Getz Pharma Research Pvt Ltd. Vs Commissioner of Service Tax –VII (CESTAT Mumbai)
The appellant is providing testing services to a foreign entity. It received payment in convertible foreign exchange. It claimed refund of input/input services used for export of services under Rule 5 of the Cenvat Credit Rules. Refund was sanctioned. However, department filed appeal before appellate authority claiming it was not an export of service. The commissioner (appeals) allowed the department appeal. Hence, appeal by the assessee.
Hon’ble CESTAT, Mumbai set aside the order and allowed the appeal. It held: (i) if the activity was not export of service; there should have been a demand of tax which has not been done; (ii) the applicability of Rule 9 was never a case in the show cause notice or finding of the lower authority; (iii) reliance placed by the Revenue on the decision of Sai Life Sciences is distinguishable; (iv) A right relating to intellectual property is not a provision for incentivizing innovation but is very much for securing property in the manner peculiar to each national jurisdiction. It is not policy but a prescription in law and the vestment of such right must meet the test of law. A right that is not registered in India cannot be deemed to have come into existence in the territory of India. Hence, cannot be said to be covered by Rule 9; (v) the appellate authority has not examined the applicability of Rule 4; hence; the matter is remanded.
