Case Law Details
Pegasus Pharmaco India Pvt Ltd. Vs Commissioner Central Goods & Service Tax (CESTAT Delhi)
a) Balaji has not commenced commercial production prior to the cut-off date of 31.3.2010 even though a single invoice was issued and therefore, it was not entitled to the benefit of the exemption notification nor has it claimed it until a few days before the slump sale agreement.
b) The so called slump sale agreement between Balaji and the assessee was, in essence, only an agreement by which the benefit of the exemption notification claimed by Balaji was transferred to the assessee to enable it to claim the benefit on the pharmaceuticals manufactured by it in its own plant (now renamed Unit I) on which the assessee had already availed the full benefit of exemption up to 10 years. Nothing in the business of Balaji remained with the assessee after transfer as the product line of Balaji was discontinued, the name was discontinued (along with it any possible goodwill), the machinery was disposed of, the location was changed to the assessee’s own plant.
c) The MOU signed between Unit I and Unit II is essentially one signed by the assessee with itself with two of its officers, viz., the Managing Director and General Manager signing as two parties whereby its own plant and land was leased to itself to manufacture the same goods which it had been manufacturing claiming the benefit of the area based exemption notification.
d) In essence, the slump sale agreement and the MOU are but a method employed to claim the benefit of the exemption notification for the pharmaceuticals manufactured by the assessee in its own plant beyond the maximum permissible period of ten years. Thus, paying about Rs. 25 lakhs under the slump sale agreement, the assessee has claimed exemption from duty beyond ten years of about Rs. 23
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