9911796707
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Issues involved:
Classification of services for Service Tax purposes under different categories; Benefit of Exemption Notification No. 17/2004; Interpretation of Research and Development Agreement. Summary: The applicant, engaged in manufacturing and marketing, entered into a Research and Development Agreement with Philips, Netherlands for various services. Initially, they paid Service Tax under "Intellectual Property Right Service" and availed exemption. Subsequently, they paid tax under "Management Consultancy Service" and later reverted to paying tax under IPR Service. Show cause notices were issued proposing to classify the service under "Scientific or Technical Consultancy Service" and denying exemption under Notification No. 17/2004. The Adjudicating authority confirmed the demand of tax under "Scientific or Technical Consultancy" for a specific period, holding that the services provided were not eligible for the exemption. The applicant argued that the services fell under IPR Service based on the R&D Agreement and past tax payments. They claimed a mistake in mentioning "Management Consultancy Service" in returns. The Revenue contended that the applicant deliberately claimed under IPR Service for exemption. The Bench examined the R&D Agreement, definitions of services, and past tax payments. They found that the applicant had a prima facie case for waiver of pre-deposit of tax, interest, and penalty. Pre-deposit was waived till the appeal's disposal, and recovery stayed.
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