Case nº Order No. AAR/02(ST)/2006 in Application No. AAR/03/ST/2006 of Authority for Advance Rulings, August 10, 2006 (case Pfizer Limited Vs Commissioner of Service Tax)

JudgeFor Respondents: A.K. Roy, Joint CDR
PresidentSyed Shah Mohammed Quadri, J. (Chairman), Somnath Pal and Brahm Avtar Agrawal, Members
Resolution DateAugust 10, 2006


(Central Excise, Customs And Service Tax)

Brahm Avtar Agrawal, Member (J)

  1. The crucial question for consideration in the instant case is as to whether the application made by Pfizer Limited for obtaining an advance ruling under Sub-section (1) of Section 96C of the Finance Act, 1994 ("Act") deserves admission or rejection.

  2. The applicant, a joint venture Indian company, has stated the question, on which advance ruling is sought, as below:

    Which clause in Section 65 to the Chapter V of the Finance Act, 1994 will be applicable to the supply of technical know-how, for the purposes of classification, since the same is not classifiable under Clause (55a) for Intellectual Property Services?

  3. The applicant has entered into agreements with its foreign collaborators for the supply of the technical know-how and assistance for use in the manufacture of certain pharmaceutical products the Indian company is engaged in.

  4. The comments on the application were furnished by the Commissioner of Service Tax, Mumbai.

  5. Before the question as to classification of service specified in the application could be adopted for examination leading to pronouncement of advance ruling thereon, it was felt necessary to call upon the applicant, and a notice was issued to it, to show cause as to how the application was maintainable, vide our Order dated 11.07.2006. This Order was passed as on examination of the application and the comments of the Commissioner it prima facie appeared to us that:

    (i) first proviso to Sub-section (2) of Section 96D of the Act was attracted; and

    (ii) Clause (a) of Section 96A of the Act was attracted as admittedly the activity was an on-going service.

  6. Although two opportunities of personal hearing were extended to the applicant, it chose not to avail of any of them. However, the applicant in its letter dated 06.08.2006 replied to the two grounds as under:

    (i) The case as mentioned in the letter dated March 27, 2006 of the Commissioner of Service Tax is for an earlier agreement and earlier period. No case is pending for the agreement forming part of the advance ruling application. Hence it is submitted that there is no case pending before any Court/Tribunal pertaining to the present agreement.

    (ii) The activity of supply of technical know how is an on-going activity.

  7. The first ground relates to the jurisdictional limitation of the Authority flowing from the provisions of Sub-section (2) of Section 96D of the Act, which reads...

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