LAWS(CE)-2009-4-181

KOPRAN LTD. Vs. CCEX

Decided On April 20, 2009
Kopran Ltd. Appellant
V/S
Ccex Respondents

JUDGEMENT

(1.) THIS stay petition has been filed by M/s Kopran Ltd., Raigad against the Order -in -Original dated 31.03.2008 passed by the Commissioner of Central Excise, Raigad. The Commissioner, vide the impugned order, has confirmed the demand of service tax of Rs. 507.95 lakhs together with interest and imposed equivalent penalty of Rs. 507.95 lakhs under Section 78 of the Finance Act, 1994. He has also imposed penalty of Rs. 1,000/ - under Section 77 ibid and penalty of Rs. 200/ - for every day during which such failure continues or at the rate of two percent, of such tax, per month, whichever is higher, till the date of actual payment of the outstanding amount of service tax subject to the total amount of the penalty payable shall not exceed the service tax payable under Section 76 ibid.

(2.) HEARD both the sides and perused the records.

(3.) THE brief facts of the case are that the applicants are the manufacturer of P or P Medicaments. In Sept. 2001, they decided to assign and transfer the trade marks of Atenolol, Atelol, Aten, Aten -AM and Aten -IF to M/s Cadila Health Care Ltd. (in short CHCL) in terms of the deed of assignment dated 18/09/2001 perpetually for a consideration of Rs. 70 crores. Pursuant to the assignment of trade marks, CHCL also requested the applicants to provide them the technological know -how to manufacture the medicaments in respect of which the trade mark had been irrevocably transferred to CHCL. Accordingly, the applicants entered into two separate agreements with CHCL, one for transfer of know -how of the formulations and the second was for transfer of know -how for bulk drugs. In respect of each of the said two agreements, the applicants were paid a consideration of Rs. 5 crore and Rs. 20 crore respectively. At the request of CHCL, the applicants had also entered into a Marketing Assistance Agreement in terms of which they were to provide product promotion service, i.e. promotion of product "Aten" by deputing applicant's field staff for such period as would mutually agreed, they were to launch customer education programme, product information to customers, provide operational field assistance in marketing, developing prospective customers, etc. The applicants were also required to provide CHCL, all communication brochure and literature used by them, send medical practitioners, traders and stocks which the applicant had, when they were manufacturing "Aten", as owner of the said brand name. The applicants were also required to assist CHCL in formulating marketing strategies, formulating customer service and pricing policies to be undertaken for achieving proposed product for specific institutional growth.