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TMI Blog2020 (3) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... tain the necessary clearances and certifications from the authorities before the product can be marketed. Without any of these activities, the product cannot be manufactured and sold. Therefore, for a marketable pharmaceutical product to come into existence, the certifications and quality control are absolutely essential. Further, pharmaceutical industry is one which involves a lot of research and development which distinguishes the product of the manufacturer from those of others. The services used in the R D have a direct nexus with the manufacture of the final products. It is not necessary that the pharmaceutical industry has a complete R D facility in each of its manufacturing units. In order to economise and benefit from the economi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction and meeting the legal certification requirements of various authorities such as Drugs Controller of India and his counterparts in other countries. 3. The appellant has created a single Integrated Product Development Organisation Unit (IPDO) at Bachupally to undertake research and development activities of their products. It caters to the requirements of various manufacturing units of the appellant. The appellant had taken CENVAT Credit on the services used in the IPDO. Revenue is of the opinion that the IPDO not being a manufacturer of excisable goods nor provider of taxable services, no CENVAT Credit is admissible on the input services used in the IPDO. The appellant s position is that various input services and inputs used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax attributable service used in IPDO. He, therefore, ordered recovery of the CENVAT Credit availed by the appellant along with interest at applicable rates. He also imposed penalties under Rule 15 of CCR 2004 read with Section 76 78 of the Finance Act, 1994. 6. Ld. Counsel would submit that the short point to be decided if the R D unit of the manufacturer of pharmaceuticals is located, not as a part of the manufacturing unit but is located elsewhere, whether the assessee can avail CENVAT Credit on the input services used in such R D facility. He would submit that this issue was before the Hon ble Tribunal of Allahabad Bench in the case of Jubilant Life Sciences Limited vs. CCE ST, Noida [2019(29)GSTL 319 (Tri.-All.)] and it was hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct from other industries. Not only is the manufacturer required to manufacture the correct drug but is also required to make it of the requisite quality and standards. Further, a manufacturer is also required to obtain the necessary clearances and certifications from the authorities before the product can be marketed. Without any of these activities, the product cannot be manufactured and sold. Therefore, for a marketable pharmaceutical product to come into existence, the certifications and quality control are absolutely essential. Further, pharmaceutical industry is one which involves a lot of research and development which distinguishes the product of the manufacturer from those of others. In fact, a large proportion of the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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