2006 (8) TMI 33 - AT - Service Tax

Service Tax Consulting Engineer services Services regarding technology transfer fee paid for services provided in Malaysia, not attracted Service tax

Summary

Issues:
Review of demand of Service tax on transfer of technology and marketing expertise.

Analysis:
The appeal arose from a Review Order passed by the Commissioner after the Additional Commissioner had dropped the demand of Service tax raised in a show cause notice. The Additional Commissioner concluded that no Service tax was leviable on the transfer of technology and marketing expertise as the service was done in Malaysia, not in India. However, the Commissioner disagreed with this finding and noted that the assessee had paid a significant amount for technology transfer. The appellants argued that they were not engaged in Consulting Engineer services and that the technology transfer fee paid to the collaborator should not be taxed. They relied on the agreement with the Malaysian Government, which specified that the technical information would be provided by the Malaysian Company in Malaysia. The appellants cited several judgments to support their argument. The Tribunal considered the submissions and concluded that the Additional Commissioner's order was correct in law. They set aside the Commissioner's Review Order and allowed the appeal based on the judgments cited by the appellants.

In conclusion, the Tribunal found that the technology transfer fee paid for services rendered in Malaysia was not subject to service tax within the territory of India. The Tribunal relied on the judgments cited by the appellants to support their decision. The appeal was allowed, and the Commissioner's Review Order was set aside.