2008 (7) TMI 120 - AT - Service Tax

Exchange for transfer of technical know-how - lump sum payment received demand of service tax under the category Consulting Engineer s Service from the appellants on the finding that transfer of technical know-how involved rendering of engineering consultation - settled legal position on the issue is that transfer of technical know-how does not amount to rendering of consulting engineer s service - impugned order is not sustainable in law - appeal filed by Robert Bosch is allowed

Summary

Issues:
- Appeal against Commissioner (Appeals) order demanding service tax and imposing penalty
- Whether transfer of technical know-how amounts to consulting engineer's service

Analysis:
1. The appeal was filed against an order by the Commissioner (Appeals) demanding service tax from the appellants and imposing penalties under the Finance Act, 1994. The Commissioner upheld the original authority's decision, which demanded service tax and imposed penalties on the appellants for receiving a lump sum payment in exchange for technical know-how transfer and license grant to manufacture automobile horns.

2. The appellant argued that transfer of technical know-how does not fall under the category of consulting engineer's service, citing various decisions to support this claim. The appellant provided copies of decisions such as Navinon Ltd. v. CCE, Colgate Palmolive (India) Ltd. v. CCE, Shore to Shore Mills (P.) Ltd. v. CCE, Ispat Industries Ltd v. CCE, and Sanyo Electric Co. Ltd. v. CST to strengthen their argument.

3. The legal position on whether transfer of technical know-how amounts to consulting engineer's service was carefully considered. The Member (T) noted that the settled legal position, as supported by the case law cited by the appellant, is that transfer of technical know-how does not constitute consulting engineer's service. Consequently, the impugned order demanding service tax and penalties was deemed unsustainable in law. Therefore, the order was set aside, and the appeal filed by the appellant, Robert Bosch, was allowed.

This detailed analysis of the judgment highlights the key issues involved in the appeal and the legal reasoning behind setting aside the Commissioner's order based on the established legal position regarding the nature of technical know-how transfer in relation to consulting engineer's service.