Case Law Details
Dabur Research Foundation Vs Commissioner of Customs (CESTAT Allahabad)
Introduction: The case of Dabur Research Foundation vs Commissioner of Customs (CESTAT Allahabad) revolves around the issue of whether the payment of VAT/Sales Tax on deemed sales is sufficient to exclude the transaction from service tax liability. The appellant, Dabur Research Foundation, challenged the order passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Ghaziabad.
Detailed Analysis: The appellant, a non-profit organization, provided integrated research solutions in pre-clinical biology to pharmaceutical, chemical, and biotechnology companies. They entered into an Asset Licensing Agreement with Fresenius Kabi Oncology Limited (FKOL) and received payments towards license fees. The appellant had paid Sales Tax (VAT) on these payments, considering them as deemed sales.
However, during an audit by the Central Excise Commissionerate, it was observed that the appellant received payments for the service of ‘Supply of Tangible Goods’ under the agreement with FKOL. A show cause notice was issued, proposing a demand for service tax.
The appellant contested the notice, arguing that since they had paid VAT on the transactions, they were not liable to pay service tax. They relied on Circulars and judicial precedents to support their contention.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
