2013 (8) TMI 376

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....mit service tax. The petitioner was allegedly engaged in selling pharmaceutical products to Merck, USA in India and had collaborated with said holding company for providing assistance in clinical research work in respect of certain drugs, carried on by an Indian Clinical Research Organisation (CRO) , in India under an agreement. Eventually, a common adjudication order dated 24.1.2012 was passed by the Commissioner, Service Tax , New Delhi. The order confirmed the petitioners service tax liability, of Rs.1,75,60,667/; Rs.53,23,716/-; and Rs.72,57,169/- for having provided Business Auxiliary Services, a taxable service (in respect of the three show cause notices referred above). The adjudication order also confirmed service tax of Rs.10,55,9....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....equired to conduct clinical trials for eventual registration and obtaining market authorisation for commercial manufacture and sale of pharmaceutical products. Towards this end, the petitioner primarily coordinates clinical trial in India for Merck USA apart from conducting the clinical trials on its own. The coordination activities in relation to clinical trials undertaken by the petitioner are under an agreement where under the petitioner discharges specific services in terms of the agreement and receives consideration therefor from Merck USA, on cost plus basis, in convertible foreign exchange. 4. As per the terms of the relevant agreement, the petitioner is required, inter alia, to obtain requisite approvals; coordinate and carry out....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n human participants so as to ascertain the safety and efficacy of such drugs on human participants. The exemption was in respect of the whole of service tax leviable thereon under Section 66 of the Act. 6. Reimbursements were also received in relation to services rendered by the petitioner. These reimbursements were by Merck USA to the petitioner in respect of provision of services such as engaging overseas vendors for printing of patient information material; organising studies by hospitals and by medical colleges, organizing conferences and the like, reports of which were sent to Merck USA; for organising studies conducted by the research organisations pertaining to market support analysis; and for organising symposia etc. 7. Under....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the Export of Service Rules, 2005, the adjudicating authority rejected this claim on the basis of the decision of this Tribunal in Microsoft (India) Pvt. Ltd. vs. C.C.E. 2009 (15) STR 680. 10. Prima facie, the activities/ operations of the petitioner under the research agreement with Merck USA are classifiable as technical testing and analysis service and the petitioner could be considered as a technical testing and analysis agency, providing the taxable service specified in Section 65 (105)(zzh), and not support of business service classifiable under Section 65(105) (zzzq) of the Finance Act, 1994 (the Act.), since in terms of Section 65A (2)(a), the activities of the petitioner generically considered should be attributed to the more s....