2009 (5) TMI 492

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.... of pharmaceutical products. They entered into an agreement with another company for the manufacture and supply of certain medicines. Further, there were two agreements - one agreement is for the supply of goods after manufacture and another agreement with regard to the transfer of technical know-how from the appellants to the buyer. For the transfer of the technical know-how, a consideration of Rs.50,00,000/- was obtained by the appellants. During the internal audit of the appellant's unit, this was found out and proceedings were Initiated for demand of duty, taking this Rs.50 lakhs as the additional consideration. The longer period was invoked on the ground that the appellants had not brought these agreements to the notice of the departme....

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....ex-II declarations of price reduction after the transfer of technical know-how and brand names which showed reduction in price. This shows that there is no intent to evade central excise duty. It was open to the department to seek further information for reduction in price. (iii) Even otherwise, the appellant had bona fide belief that there was no supply of technical know-how by buyer as the right to use the same had been retained in the appellant, there was no additional consideration provided by buyer. Hence transaction value was the assess able value. There was no intent to evade payment of duty. Hence demand is barred by limitation. (iv) Without prejudice, even if extended period is applicable even then the show cause notice canno....

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.... the Technical know-how cannot be treated as additional consideration, when the sale price was for know-how relating to 56 brands, while the appellant manufactured only 6 of such brands under the manufacturing agreement. (viii)Further the said brands were also manufactured by third parties, like Star Drugs & Research Labs Ltd. Therefore, duty cannot be demanded in the hands of the appellant for the know-how used by third parties as well, with whom similar manufacturing agreements were entered into by Recon Healthcare. (ix) The law does not provide for arty mechanism for the determination of the value of technical know that can be attributed for the goods cleared by the appellant. It is settled law that where the computation provision ....