2008 (10) TMI 26 - AT - Service Tax

Agreement is for transfer of technology and a consolidated amount is the consideration for transfer of technology - there is no clause in agreement that fees for technical assistance shall be paid against monthly invoice - hence service tax is not required to be paid - agreement for transfer of technology know-how would not fall under the category of consulting engineer for service tax liability revenue appeal dismissed

Summary

Issues:
Interpretation of service tax liability under Consulting Engineer Service for transfer of technology.

Analysis:
The Revenue filed an appeal against an order where it was held that the agreement in question did not fall under the ambit of "Consulting Engineer" service as it was for the transfer of technology, not technical assistance. The Revenue argued that the agreement was for technical assistance, citing a previous Tribunal decision. However, the respondents contended that the agreement was for the grant of a license to use glassline technology for manufacturing wire cable, and a consolidated amount was paid for this purpose. They relied on other Tribunal decisions to support their stance that transfer of technology know-how does not fall under Consulting Engineer Service for service tax liability.

Upon reviewing the agreement terms, the Tribunal found that it was indeed for the transfer of technology, with a consolidated amount as consideration. The Tribunal distinguished the case cited by the Revenue, noting that in that case, fees for technical assistance were to be paid monthly against certified invoices, which was not the case in the present agreement. Therefore, the Tribunal concluded that the previous decision's ratio was not applicable in the current scenario, and there was no merit in the Revenue's contention. Consequently, the appeal was dismissed.

The judgment was delivered by the Tribunal, comprising Mr. S.S. Kang, Vice President, and Mr. Rakesh Kumar, Member (Technical). The Departmental Representative for the Revenue was Shri V. Kumar, while Shri Alok Barthwal represented the respondents. The Tribunal allowed a Miscellaneous application by the Revenue to place a fresh authorization on record before proceeding with the appeal hearing. The decision was pronounced in the Open Court after hearing arguments from both sides.