2008 (5) TMI 185 - AT - Service Tax

Intellectual Property Right - contention is that the applicant had not received any consulting engineering service but the agreement is only for transfer of Intellectual Property Rights by way of technical know how for the manufactured items in question since agreement is in respect of the transfer of Intellectual Property Right prima facie, hence the applicant had a strong case for waiver of pre-deposit of amount of Service tax and penalties

Summary

Issues involved: Delay in filing appeal, waiver of pre-deposit of service tax and penalties, nature of agreement - consulting engineering service or transfer of Intellectual Property Rights.

Delay in filing appeal:
The applicant sought condonation of a 20-day delay in filing the appeal, providing reasons for the delay. The Tribunal, considering the explanations offered, condoned the delay in filing the appeal.

Waiver of pre-deposit of service tax and penalties:
The applicant applied for the waiver of pre-deposit of Service tax amounting to Rs. 7,09,640/- and penalties. The applicant argued that the agreement pertained to the transfer of Intellectual Property Rights, not consulting engineering services, as determined by the Commissioner (Appeals) in an earlier proceeding. The Tribunal, after examining the agreement and the contentions presented, found that the applicant had a strong case for waiver of pre-deposit of tax and penalties. Consequently, the pre-deposit of tax and penalties were waived, and stay petitions were allowed.

Nature of agreement - consulting engineering service or transfer of Intellectual Property Rights:
The Revenue contended that the Commissioner (Appeals) had previously determined that the applicant received consulting engineering services. However, the applicant maintained that the agreement was for the transfer of Intellectual Property Rights through technical know-how, not consulting engineering services. The Tribunal reviewed the agreement and found it to be related to the transfer of Intellectual Property Rights. As a result, the Tribunal concluded that the applicant had a strong case for the waiver of pre-deposit of tax and penalties based on the nature of the agreement. The appeal was directed to be listed with the pending appeal related to the same matter.

This judgment primarily dealt with the delay in filing the appeal, the waiver of pre-deposit of service tax and penalties, and the interpretation of the nature of the agreement as either consulting engineering services or the transfer of Intellectual Property Rights. The Tribunal, after thorough examination of the agreement and contentions presented, ruled in favor of the applicant, waiving the pre-deposit of tax and penalties based on the nature of the agreement and the arguments put forth.