2008 (5) TMI 154 - AT - Service Tax

Consideration paid by the appellants to a German company for transfer of technical know-how in many cases tribunal has held that transfer of technical know-how to a person in India from abroad is not exigible to service tax in the category of Consulting Engineer s Service - appellants have succeeded in making out a prima facie case stay granted

Summary

Issues:
Challenge against demand of service tax in the category of "Consulting Engineer's Service" for a period prior to 10-9-2004.

Analysis:
The judgment pertains to an appeal challenging a demand of service tax under the category of "Consulting Engineer's Service" for a period before 10-9-2004. The dispute revolves around the consideration paid by the appellants to a German company for the transfer of technical know-how for manufacturing "onload tap changers" in India. The Tribunal has previously held that the transfer of technical know-how from abroad to a person in India is not subject to service tax under "Consulting Engineer's Service." The appellant's counsel reiterated this legal stance during the hearing. However, the respondent cited a previous Tribunal decision where service tax was deemed payable on consideration for technical assistance provided by a foreign company, falling under Consulting Engineer's Service as per Section 65(31) of the Finance Act. The lower authority also relied on this decision, noting that contrary decisions had been appealed against without any stay by the Appellate Court.

The Tribunal found in favor of the appellants, acknowledging the prima facie case made by them. Consequently, a waiver of pre-deposit and stay of recovery concerning the service tax and penalty amounts were granted. The judgment was dictated and pronounced in open court, providing a resolution to the dispute over the applicability of service tax on technical know-how transfer under the Consulting Engineer's Service category.