2007 (5) TMI 191 - AT - Service Tax

Transfer of technical know-how by a foreign collaborator - Commissioner (Appeals) held that such transfer of technical know-how or assistance does not come within the ambit of the definition of consuiting engineers by levy of service tax - issue is no longer res integra and the Commissioner has rightly followed the rulings in his findings and has correctly decided the issue in assessee s favour

Summary

Issues:
1. Whether transfer of technology, technical assistance, etc., amounts to rendering service as a Consulting Engineer for Service Tax purposes.
2. Whether the recipient of technical know-how from a foreign company can be held liable to pay Service Tax.

Analysis:
1. The Commissioner (Appeals) considered the transfer of technical know-how by a foreign collaborator to the respondent and held that it does not fall under the definition of consulting engineers for levy of service tax. The Commissioner relied on a decision of the CESTAT, West Zonal Bench, Mumbai in the case of M/s. Navinon Ltd. v. Commissioner of Central Excise, Mumbai-VI. The Commissioner concluded that the services received by the appellants do not qualify as services of a consulting engineer for Service Tax purposes, based on the above decision. Consequently, the Order-in-Original passed by the Assistant Commissioner of Central Excise, Service Tax Division, Bangalore was set aside, and the appeal by the appellant was allowed.

2. In the case of Goetze TP (India) Ltd., a similar Order was passed by the Commissioner following the same reasoning as in the previous case. The Departmental Representative contended that the transfer of technical know-how and assistance should be treated as falling within the ambit of Consulting Engineers. However, the learned counsel for the appellant referred to various judgments, including the case of Kirloskar Electric Company and Amco Batteries Ltd., where similar issues were decided in favor of the assessee. The Tribunal noted that the issue is no longer res integra, and the Commissioner rightly followed the previous rulings in favor of the assessee. The Tribunal found no merit in the appeals and rejected them based on the supporting citations and previous decisions.

In conclusion, both appeals raised common questions regarding the taxation of transfer of technical know-how and assistance from foreign collaborators. The Tribunal upheld the decisions of the Commissioner (Appeals) in both cases, ruling that such transfers do not amount to services of a consulting engineer for Service Tax purposes. The judgments cited by the counsel and the previous rulings supported the assessee's position, leading to the rejection of the appeals.