In the case of Commissioner of Central Excise, Ahmedabad-II Versus CADILA HEALTHCARE LTD., the Hon’ble High Court of Gujarat {Tax Appeal No. 353 of 2010 and 204 of 2011 decided on 07.11.2012 (2013 (30) S.T.R. 3 (Guj.)} has held that “Technical Testing and Analysis services” availed by the assessee for testing of clinical samples prior to commencement of commercial production is a eligible input service for claiming CENVAT.
In the instant case, the assessee was engaged in the manufacture of medicaments and for developing a new drug, he has availed the services of “Technical Testing and Analysis Agency services”. With reference to the same, the department alleged that unless goods reached to the commercial production stage, CENVAT credit is not admissible on the same.
In this regard, the Hon’ble High Court has held that the process of developing a new drug is an ongoing process and without availing the said service, it would be impossible to undertake manufacture of any new drug. Thus, the said service shall be deemed to be clearly used in relation to the activity of manufacture of the final product, hence eligible for CENVAT credit. Therefore, the Hon’ble High Court has decided the case in the favour of the assessee.
The copy of the case is annexed for your kind reference.
