2011 (6) TMI 379 - AT - Service Tax

Waiver of predeposit - The applicant operates Hallmarking Scheme under the BIS Act, in order to ensure purity of gold sold in India The case of the department is that Hallmark is an intellectual property right and that BIS is liable to service tax under Intellectual Property Service in respect of the amounts received from the Hallmarking and Assaying centres - Held that - As per the scheme, any jewellery retailer / manufacturer desirous of obtaining a licence, applies to BIS for use of Standard Mark (Hallmark) on their jewellery and a licence is granted to the jeweler - Prima facie , the Hallmark is not a brand name or trade name or intellectual property of the applicant but a universally recognized quality mark to certify purity of jewellery articles and prima facie it is only a symbol indicating the purity of gold/silver jewellery, which has been implemented by the Government of India, in public interest - The applicant is only the authorized statutory body to administer the Hallmarking scheme in India - Thus Assessees have made out a strong prima facie case for unconditional waiver on merits and hence dispense with predeposit of the amounts in dispute and stay recovery thereof pending the appeal.

Summary

Issues: Application for waiver of predeposit of Rs.14,76,620/- together with interest and equal amount of penalty.

Analysis:
The case involved an application for waiver of predeposit of a significant amount along with interest and penalty. The applicant, a statutory body under the Ministry of Food, Consumer Affairs, and Public Distribution, operates a Hallmarking Scheme to ensure the purity of gold sold in India. The scheme requires jewellers to follow BIS-approved testing and inspection procedures. The Department contended that the Hallmark is an intellectual property right and that the BIS is liable to service tax under "Intellectual Property Service" for the amounts received from Hallmarking and Assaying centers. However, the Tribunal noted that the Hallmark is not a brand name or trade name but a quality mark to certify the purity of jewellery articles. It is a symbol indicating the purity of gold/silver jewellery, implemented by the Government in public interest. The applicant, as the authorized body for the Hallmarking scheme, is not transferring or permitting the use of the Hallmark for consideration. Additionally, unauthorized use of the Hallmark is punishable under the BIS Act, not under intellectual property laws.

The Tribunal found that the assessees had made a strong prima facie case for unconditional waiver on merits. Consequently, the Tribunal dispensed with the predeposit of the disputed amounts and stayed the recovery pending the appeal. The operative part of the order was pronounced in open court on 13.6.2011.