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Issues Involved: Appeal against demand of Service Tax u/s 65(31) of the Finance Act, 1994 for consulting engineer service.
Summary: Issue 1: Appellant's contention of not providing consulting engineer service. The appellant entered into an agreement with M/s. Guala India Ltd. for transfer of technology regarding non-refillable closures. A show cause notice was issued demanding Service Tax as per Section 65(31) of the Finance Act, 1994. The appellant argued that the agreement was for transfer of technology for manufacturing goods, not consulting engineer service. They cited terms of the agreement and previous tribunal decisions to support their claim. Issue 2: Revenue's argument on the scope of consulting engineer service. The Revenue claimed that the appellant had provided consulting engineer service while transferring know-how, justifying the demand. The definition of "consulting engineer" u/s 65(31) of the Finance Act, 1994 was referred to in this context. Issue 3: Interpretation of the agreement and relevant case laws. The Tribunal analyzed the agreement between the parties, noting that it involved transfer of know-how and patent rights. Referring to the Yamaha Motors case, it was established that agreements for technical collaboration and intellectual property rights do not fall under consulting engineer services. The judgment of the Karnataka High Court in CST v. Araco Corporation further supported this interpretation. Decision: The Tribunal found that the agreement was indeed for the transfer of technical know-how and patent rights, falling under Intellectual Property Rights, not consulting engineer services. Citing relevant case laws, the impugned order was set aside, and the appeal was allowed.
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