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2008 (4) TMI 201 - AT - Service TaxTechnical know-how received from foreign company for the purpose of manufacturing and marketing - contention of the Revenue is that the applicant is liable to pay Service Tax as they have received the services of Consulting Engineer issue is decided in favour of appellant in various decisions of tribunal in similar cases - prima facie a strong case for waiver of pre-deposit of duty and penalty stay granted
Issues involved: Liability to pay Service Tax for technical know-how received from a foreign company for manufacturing and marketing of "Acetylene Carbon Black" prior to 16-2-2002.
Analysis: 1. Issue of Liability for Service Tax: The main issue in this case revolves around the liability of the applicant to pay Service Tax for the technical know-how received from a foreign company. The Revenue argues that the applicant is liable to pay Service Tax as they received services of a Consulting Engineer. However, the applicant contends that the issue predates 16-2-2002 and cites various judgments, including those of Bajaj Auto Ltd., M & B Footwear (P) Ltd., and Essel Propack Ltd., in their favor. 2. Agreement Analysis: Upon examining the agreement between M/s. Karbo Chem and the applicant, it is noted that the first party provided technical know-how for manufacturing and marketing of "Acetylene Carbon Black" in exchange for a consideration. The agreement specified a payment of US $115,000 for the basic engineering package. The Tribunal finds that the issue in this case aligns with previous decisions. The JDR relies on the decision in Eicher Motors Ltd. and the judgment of the Hon'ble Kerala High Court in the case of CCE v. Kerala State Electricity Board, which was upheld by the Hon'ble Supreme Court, but the Tribunal deems this reliance as misplaced due to the differing facts of the present case. 3. Prima Facie Case for Waiver: After considering the submissions and perusing the records, the Tribunal concludes that the applicant has established a strong prima facie case for the waiver of pre-deposit of duty and penalty. Consequently, the application for the waiver of pre-deposit amounts is allowed, and the recovery of said amounts is stayed pending the disposal of the appeal. In summary, the judgment addresses the issue of liability for Service Tax concerning technical know-how received from a foreign company for the manufacturing and marketing of "Acetylene Carbon Black" prior to 16-2-2002. The Tribunal analyzes the agreement between the parties, considers relevant legal precedents, and ultimately grants the applicant's request for a waiver of pre-deposit amounts, staying the recovery until the appeal is resolved.
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