2007 (10) TMI 2 - AT - Service Tax

Demand Service tax- Alleged that on activity of transferring of technology service tax is leviable- After considering all the facts held that demand not sustainable

Summary

Issues:
1. Whether the activity of transferring technology can be considered as 'Consulting Engineer' services for the purpose of Service Tax liability.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore arose from an Order-in-Appeal (OIA) where the Revenue categorized the appellant's activity of technology transfer as falling under the 'Consulting Engineer' category. The appellants contested this classification, arguing that they were merely transferring technology by supplying designs, which does not align with the definition of Consulting Engineer. The appellants relied on several judgments to support their stance.

The Tribunal referenced various judgments to support the distinction between technology transfer and Consulting Engineer services. In the case of Amco Batteries Ltd. v. CCE, Bangalore, it was held that payments for know-how and royalty do not constitute consultancy, and the right to use a trademark is a property transaction, not consultancy. Similarly, in CCE, Madurai v. Reichie De Massari Ag Switzerland, it was established that technology transfer is separate from Consulting Engineer services. The Tribunal also considered BST Ltd. v. CCE, Cochin, and India Pistons Ltd. v. CCE, Chennai, which emphasized that technical know-how or technology transfer does not fall under the ambit of Consulting Engineer services for Service Tax liability.

The learned Counsel representing the appellant argued that the issue was settled in their favor based on the aforementioned judgments. The learned JDR from the Revenue acknowledged that the appellant was solely involved in technology transfer without providing consulting services. After careful consideration, the Tribunal concluded that the appellants' activity of technology transfer did not constitute Consulting Engineer services as per the cited judgments. Therefore, the impugned order was deemed incorrect, and the appeal was allowed with consequential relief, if any.

In conclusion, the Tribunal's decision highlighted the distinction between technology transfer and Consulting Engineer services for the purpose of Service Tax liability. The judgment emphasized that merely transferring technology, without providing consulting services in the field of engineering, does not fall within the scope of 'Consulting Engineer'. The decision was based on a thorough analysis of relevant precedents and the specific nature of the appellant's activities.