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MSD Pharmaceuticals Pvt. Ltd V/S CST, Delhi-I


Company & Directors' Information:- MSD PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24230DL2004PTC164459

Company & Directors' Information:- B S P PHARMACEUTICALS LIMITED [Active] CIN = U24231GJ1987PLC009556

Company & Directors' Information:- G P T PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24233TG2009PTC064156

Company & Directors' Information:- A N PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24233DL2000PTC108617

Company & Directors' Information:- P AND B PHARMACEUTICALS LIMITED [Active] CIN = U24230MH1978PLC020846

Company & Directors' Information:- E L C PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24239DL1998PTC097310

Company & Directors' Information:- V C PHARMACEUTICALS (INDIA) PRIVATE LIMITED [Active] CIN = U24230KL2012PTC031429

Company & Directors' Information:- C I PHARMACEUTICALS PVT. LTD [Active] CIN = U24233WB1988PTC045057

Company & Directors' Information:- M J PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24230MH1996PTC101370

Company & Directors' Information:- R. J. PHARMACEUTICALS (INDIA) PRIVATE LIMITED [Under Liquidation] CIN = U24232RJ1994PTC008899

Company & Directors' Information:- R P L (INDIA) PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24239DL2002PTC115402

Company & Directors' Information:- L S K PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24231KA1990PTC011299

Company & Directors' Information:- P P PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24232WB2003PTC096731

Company & Directors' Information:- F C PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24239GJ2007PTC051567

Company & Directors' Information:- G D S J PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24239DL2001PTC109888

Company & Directors' Information:- S S M PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24232RJ1982PTC002502

Company & Directors' Information:- S S PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24231UP1982PTC005587

Company & Directors' Information:- M A S PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U51397PB2004PTC027688

Company & Directors' Information:- A V PHARMACEUTICALS PRIVATE LIMITED [Amalgamated] CIN = U24232DL1999PTC098651

Company & Directors' Information:- P G PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U74899DL1990PTC039757

Company & Directors' Information:- E M PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24239MH1992PTC066216

Company & Directors' Information:- B D PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24233WB2009PTC132243

Company & Directors' Information:- A G D PHARMACEUTICALS PVT LTD [Strike Off] CIN = U24231KL1984PTC003885

Company & Directors' Information:- S T PHARMACEUTICALS PVT LTD [Strike Off] CIN = U51909WB1989PTC047031

Company & Directors' Information:- N V K PHARMACEUTICALS PRIVATE LIMITED [Under Process of Striking Off] CIN = U24296UP2016PTC082942

Company & Directors' Information:- G K D PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24231WB1999PTC089334

Company & Directors' Information:- C F PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24231TN1982PTC009598

Company & Directors' Information:- M D PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24232WB2008PTC121471

Company & Directors' Information:- I. S. PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24306KA2016PTC097524

Company & Directors' Information:- A M PHARMACEUTICALS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U24233KL2010PTC026018

Company & Directors' Information:- B. C. PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U51900UP2018PTC109946

Company & Directors' Information:- M M PHARMACEUTICALS LIMITED [Strike Off] CIN = U24231TN1982PLC009714

Company & Directors' Information:- S AND S PHARMACEUTICALS INDIA PVT LTD [Strike Off] CIN = U24232CH1984PTC005799

Company & Directors' Information:- N C PHARMACEUTICALS PVT LTD [Strike Off] CIN = U24239HP1986PTC006997

Company & Directors' Information:- R G PHARMACEUTICALS CO PVT LTD [Strike Off] CIN = U24231HP1978PTC003877

Company & Directors' Information:- B M G PHARMACEUTICALS PVT LTD [Under Liquidation] CIN = U24232WB1974PTC029532

Company & Directors' Information:- M S PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24231UP1995PTC018120

Company & Directors' Information:- B G PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24231OR2002PTC006872

Company & Directors' Information:- D R P S PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24232UP2004PTC028820

Company & Directors' Information:- K N B PHARMACEUTICALS LIMITED [Strike Off] CIN = U24239CH1996PLC018286

Company & Directors' Information:- J S I PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24232UP1998PTC023778

Company & Directors' Information:- B I PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24231CH1997PTC019728

Company & Directors' Information:- J G PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24231DL1987PTC027452

Company & Directors' Information:- J N PHARMACEUTICALS LIMITED [Strike Off] CIN = U24230TG1996PLC023652

Company & Directors' Information:- J AND J PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24119OR1973PTC000584

Company & Directors' Information:- C W C PHARMACEUTICALS PVT. LTD. [Active] CIN = U24231HR1990PTC030903

Company & Directors' Information:- A J S PHARMACEUTICALS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U24232KA1972PTC002273

Company & Directors' Information:- A C PHARMACEUTICALS PVT LTD [Active] CIN = U51397WB1970PTC027869

Company & Directors' Information:- R K PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24232DL2006PTC154640

Company & Directors' Information:- DELHI PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24239DL2003PTC122526

Company & Directors' Information:- A. PHARMACEUTICALS PVT LTD [Strike Off] CIN = U24232DL1999PTC100973

Company & Directors' Information:- N G PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24100MH2010PTC202028

Company & Directors' Information:- S V N PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24230MH2005PTC155731

Company & Directors' Information:- S. V. G. PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24297MH2010PTC202540

Company & Directors' Information:- K. D. PHARMACEUTICALS PRIVATE LIMITED [Under Process of Striking Off] CIN = U74999UP2016PTC084198

Company & Directors' Information:- Y. R. PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24232CH2011PTC032883

Company & Directors' Information:- A. B. PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U51909AS2012PTC011351

Company & Directors' Information:- N. S. PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U52311JH2007PTC012709

Company & Directors' Information:- J A PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24232DL2005PTC136777

Company & Directors' Information:- S P R PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24232DL2005PTC137405

Company & Directors' Information:- D F L PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U51101DL2014PTC270743

Company & Directors' Information:- A R K PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U74120DL2014PTC266920

Company & Directors' Information:- N N PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U33111BR2012PTC018665

Company & Directors' Information:- V AND B PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24290UP2020PTC133785

Company & Directors' Information:- M D PHARMACEUTICALS PRIVATE LIMITED [Active] CIN = U24290MH2021PTC360217

Company & Directors' Information:- U V PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U99999MH1998PTC117667

Company & Directors' Information:- J. V. PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24239MH2009PTC189669

Company & Directors' Information:- K R R PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24232TG2008PTC062007

Company & Directors' Information:- A P PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24233TG2008PTC062019

Company & Directors' Information:- C K PHARMACEUTICALS PRIVATE LIMITED [Strike Off] CIN = U24233UP2007PTC033596

    Service Tax Appeals Nos. 522-524 of 12, 56440 of 2013 (Arising out of the Order-in-Original No. 12-14/GB/2012 dated 24/01/2012 and No. 08/GB/2013 dated 29/01/2013 both passed by The Commissioner (Appeals), Service Tax, Delhi-I) and Final Order Nos. 50802-50805/2018

    Decided On, 22 February 2018

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi

    By, THE HONORABLE JUSTICE: S.K. MOHANTY
    By, MEMBER AND THE HONORABLE JUSTICE: B. RAVICHANDRAN
    By, MEMBER

    For Petitioner: N. Venkataraman, Senior Advocate and Indu Amar, Advocate And For Respondents: R.K. Manjhi, Authorized Representative (DR)



Judgment Text


1. These 4 appeals are on common dispute and are accordingly taken up together for disposal. There are two impugned orders covering period 2006-2007 to 2011-2012.

2. The brief facts of the case are that the appellant entered into an agreement with their holding company, M/s. Merck, USA who is a pharmaceutical company engaged in, among other things, research, development and manufacture of medicines and vaccines. In the course of their business M/s. Merck, USA intended to do certain clinical trials for newly developed drugs, in India. For this purpose, they have entered into two separate agreements, one with the appellant and other one with M/s. SIRO, Thane. The common purpose of these agreements is to conduct clinical trial in India as per the requirement of M/s. Merck, USA. The present dispute is with reference to service tax liability of the appellant for their activities connected to such clinical trials. The Revenue proceeded against the appellant to recover and demand service tax under business support service. The claims of the appellant are that these are clinical trial operations, exempted from service tax in terms of Notification 11/2007-ST dated 01/03/2007 as well as these services are in any case are availed by M/s. Merck, USA, qualifying the export of service criteria. Both these grounds submitted by the appellant were rejected by the Original Authority who proceeded to confirm service tax liability under BSS alongwith penalties.

3. The learned Counsel appearing for the appellant submitted that agreements entered into by M/s. Merck, USA with the appellant and SIRO are with a common goal of getting a new drug tested in India in clinical trial. Both the appellant as well as SIRO are recognized clinical research organization. Both applied to the Drug Controller General of India (DCGI) and obtained no objection to proceed with the clinical trial in pursuance of the said agreement. In terms of these agreements with M/s. Merck, USA appellant and SIRO had defined roles which complemented each other in the final conclusion of the clinical trial as per the standards and also in preparing and reporting to DCGI and coordinating with M/s. Merck, USA.

4. The learned Counsel submitted that the Notification 11/2007 is clear to the effect that services provided in relation to testing and analysis of newly developed drugs on human participants so as to ascertain the safety and efficacy of such drugs are exempted. The nature of activities undertaken by the appellant are, admittedly, in connection with such testing and analysis of new drug on human participants. Accordingly, he submitted that the services are clearly exempted by the said notification.

5. Without prejudice to the submission on merit, as above, the learned Counsel submitted that the services of clinical trial are carried out for and on behalf of M/s. Merck, USA, their holding company. The beneficiary of clinical trial is M/s. Merck, USA. The payment in foreign exchange is received from M/s. Merck, USA. All the ingredients to satisfy export of service have been fulfilled in this case. Relying on the decision of the Tribunal in Paul Merchants Ltd. vs. CCE, Chandigarh : 2012 - TIOL - 1877 - CESTAT - DEL. the learned Counsel submitted that the services are not liable to be taxed in India.

6. The learned AR drew our attention to specific findings recorded by the Original Authority. He submitted that SIRO was carrying out clinical trial. The appellant only provided support for such clinical trial. As such, the activities of the appellant are to be taxed as support service of business or commerce.

7. We have heard both the sides and perused the appeal record. The Original Authority clearly recorded that SIRO and the appellant have entered into an agreement with M/s. Merck, USA. It is also recorded that the appellant, in terms of the said agreement, will coordinate clinical status in addition to conducting clinical studies. We have also perused the details of various activities undertaken by the appellant. The appellants were engaged in finalizing the testing protocol, training the staff for trial, applying and obtaining approval of DCGI, import of drug to be tested in India, monitoring the protocol, finance management, reporting adverse developments, documentation and archival of the said document of the final reporting to M/s. Merck, USA and DCGI. SIRO were also involved in activities in the said clinical trial. These activities are initiation of trial sites, monitoring, trial monitoring, site management, query response and coordinate with M/s. Merck, USA etc. Perusal of these details clearly reveal that the appellant are directly engaged in the activities of conducting clinical trial studies. They did obtain no objection approval from the concerned drug authorities in India. In the face of such factual details, we find that the findings recorded in the impugned order is neither factually nor legally tenable. The appellants activities are clearly covered by the exemption under Notification 11/2007-ST dated 01/03/2007.

8. Considering also the alternate argument of the appellant, we

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note that these services are in fact provided in terms of agreement with M/s. Merck, USA who paid the consideration in convertible foreign exchange. The beneficiary of service as per the terms of the agreement is M/s. Merck, USA. Following the ratio of the decision of the Tribunal in Paul Merchants Ltd. (supra) it is clear that these services are for delivery and consumption of an entity located outside India. On this ground also, the appellant is having a case on merit. 9. In view of the above findings the impugned orders are set aside. The appeals are allowed.
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