The innovation as well as the development services furnished to the German company amount to the export of the services, Punjab and Haryana High Court ruled.
The taxpayer does not function in any marketing of the products of Fresenius Kabi Deutschland GmbH Germany (FKDG) nor any product is delivered via FKDG to the same, as seen by the bench Justice Ritu Bahri and Justice Manisha Batra.
The activities are real and have been performed by the applicant and have been levied the cost from FKDG for doing it. Hence the same does not being an intermediary of FKDG. The furnished services via it before FKDG could not be mentioned as intermediary services.
The petitioner, a prominent pharmaceutical company, specializes in the production of anti-cancer drugs and is deeply committed to advancing innovation and development in the realm of oncology medications, adhering to global standards.
With unwavering dedication to its core values and significant strategic investments in oncology drug innovation and development, the petitioner consistently aspires to achieve global recognition.
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Over time, the petitioner has established agreements for product distribution and innovation and development services with various international companies, including FKDG, a German entity operating under German law. The petitioner has engaged in multiple agreements with FKDG, Germany, to deliver its services.
Notably, the petitioner has been providing services to FKDG since 2011, and this service provision was deemed as an export of services in an order issued by the Assistant Commissioner on July 29, 2016. It is essential to note that this order remains binding on the respondents and cannot be reconsidered, especially since no appeal has been lodged against the initial assessment.
During the Service Tax era, the Assistant Commissioner of Service Tax, Division XVIII, GGN, issued a show-cause notice and conducted an adjudication process. One of the pivotal questions raised during this adjudication pertained to whether the assessee had indeed exported services in accordance with the Export of Service Rules 6A.
In addressing this query, the Assistant Commissioner meticulously scrutinized the matter of service exportation and examined the agreements forged between the petitioner and FKDG. The conclusion reached was that the petitioner had satisfactorily met all the conditions stipulated under Section 6A of the Export of Service Rules.
The matter of whether the petitioner qualifies as a service exporter or not was definitively resolved and remains legally binding on the respondent.
The court subsequently nullified previous orders and ruled in favour of the writ petitioner, affirming their entitlement to seek a refund for the period spanning from July 2017 to March 2019 from the department.
| Case Title | M/s Fresenius Kabi Oncology Ltd. Versus Union of India |
| Counsel For Respondent | Gurinderjit Singh |
| Date | 24-04-2023 |
| Counsel For Appellant | Sandeep Goyal |
| Case No.: | CWP-17437-2021 |
| Punjab & Haryana High Court | Read Order |
