2005 (9) TMI 654 - AT - Service Tax

Summary

Issues:
1. Waiver of pre-deposit of Service Tax and penalty
2. Taxability of services received under "Consulting Engineer" category
3. Liability of the appellant as an authorized agent
4. Applicability of earlier Tribunal decisions on similar cases

Analysis:
1. The Tribunal considered the application for waiver of pre-deposit of Service Tax and penalty amounting to Rs. 30,64,976 and Rs. 33,66,476, respectively. After hearing both parties, the Tribunal decided to proceed with the appeal itself, as the issues in dispute were settled by earlier Tribunal decisions. The pre-deposit was waived, and a stay of recovery was granted to take up the appeal for final decision.

2. The case involved the appellant engaged in the manufacture of Multilayered Plastic Laminated Collapsible Tubes, entering into an agreement with another company for technical know-how. The show cause notice alleged taxable services under the "Consulting Engineer" category, holding the appellant liable for service tax and penalties. The lower authorities upheld the demand and penalties, leading to the appeal.

3. The Tribunal examined the appellant's role as an authorized agent of the foreign company providing technical know-how. Referring to previous Tribunal decisions, it was noted that royalty payments for technology and know-how did not equate to services provided by the foreign company to the Indian company. Citing relevant cases, the Tribunal concluded that the appellant could not be held liable for service tax as they were not the authorized representative of the foreign company. Therefore, the duty demand and penalties were set aside, and the appeal was allowed.

4. The Tribunal relied on earlier decisions such as Navinon Ltd. v. CCE and Bajaj Auto Ltd. v. CCE, where it was established that royalty payments for technology and know-how did not constitute taxable services. The Tribunal applied the principles from these cases to the present situation, determining that the duty demand and penalties imposed on the appellant were not sustainable. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.