CGST, C.E. & C.C. -C. C.E. & S.T. -Indore Versus M/s Diabetes Thyroid Hormone Research Institute Pvt. Ltd.
Service Tax
2018 (7) TMI 275 – CESTAT NEW DELHI – 2019 (24) G. S. T. L. 560 (Tri. – Del.)
CESTAT NEW DELHI – AT
Dated:- 5-7-2018
Appeal No. ST/CROSS/52047/2015 in ST/52448/2015-CU[DB] – Final Order No. 52429/2018
Service Tax
Hon'ble Mr. V. Padmanabhan, Member ( Technical ) And Hon'ble Ms. Rachna Gupta, Member ( Judicial )
Shri Sanjay Jain, DR for the Appellant
Shri Somesh Arora, Advocate for the Respondent
ORDER
Per Rachna Gupta
The present appeal originates from the Order of Original Adjudicating Authority No. 04-05/COMMR/IND/ST/2015 dated 16.02.2015. The relevant factual matrix is that M/s Diabetes Thyroid Hormone Research Institute Pvt. Ltd. (DTHR) is performing clinical trial to new drugs for various manufacturing companies (sponsors). The said activity was opined to be covered under the category of technical testing and analysis services as defined u
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on, the respondent was obtaining benefit of exemption, is actually not applicable to the respondent, it not being a Clinical Research Organization (CRO), irrespective the activity of clinical trial as done by respondent is the one for technical testing and analysis services as mentioned in Section 65(106) of Finance Act, 1944. It is impressed upon that even the adjudicating authority has concluded the activity of the respondent to be the one under Section 65(106) of the Act. The benefit of both the Notifications is alleged to have wrongly been given to the respondent. It is further impressed upon by Appellant/Department that clinical practice guidelines as formulated by Drug Controller General of India are to be strictly followed and according to those guidelines, any person, company or an organization who want to get any new drug molecule clinically examined and tested is the sponsor who has to apply in prescribed format with the Drug Controller General of India in a prescribed format
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ing of clinical research to any site, duly approved for the purpose. The approval comes from the Drug Controller only in favour of anyone who is conducting trial, because without the said approval, even the trial sites and the investigators cannot conduct the test. Hence such approved trial sites, when conduct such clinical testings, they are no less than a CRO and as such, are entitled for the exemption under the above said Notifications. Otherwise also, the appellants are the Contract Research Organisations, duly approved. The adjudicating authority has considered all the aspects rightly thereby leaving no infirmity in the order. Accordingly, the appeal is prayed to be rejected.
5. We have heard both the parties and perused the records. Our considered opinion is as follows:
(i) Since it is an admitted fact that the respondents are conducting clinical analysis as can be categorised as technical testing and analysis under Section 65(106) of the Act which is liable to Service Tax und
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separately. This perusal makes it clear that CRO, trial site, sponsor and investigators are the distinct entities. It is mandatory for even the trial site to obtain an approval from a Drug Controller of India in case of conducting such clinical trials as a question.
(iii) The adjudicating authority, while appreciating the set guidelines, has observed that clinical research organization is a social unit of people like sponsor, principal investigator, investigator, volunteers, trial sites, data analyst, etc., which is meant to pursue a goal with different assigned roles, responsibilities and authority to carry our different tasks when all these are acquired together having sole objective to carry out clinical research. It has also been emphasized by the adjudicating authority itself that it is only in its collective form that the Clinical Research Organisation comes into existence. Thus, findings in the order under challenge itself are very much differentiating a CRO than from a trial
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