2024 (10) TMI 1066 - AT - Service Tax

Classification of service - intellectual property rights service or not - supply of technical drawing and other documents - extended period of limitation - HELD THAT - The said issue has been examined by this Tribunal in the case of M/S. HOOGHLY MET COKE POWER CO. LIMITED VERSUS COMMISSIONER OF SERVICE TAX 2024 (8) TMI 611 - CESTAT KOLKATA wherein it was held ' The designs and drawings have been considered as 'goods' at the time of importation and customs duty has already been paid on the same. Hence, we hold that the imported drawings and designs cannot be considered as taxable service under the category of intellectual property services . Accordingly, we hold that the demand of service tax on the drawings and designs supplied by SSIT under the category of intellectual property services in the impugned order is not sustainable.' Thus, no Service Tax is payable by the appellant under the category of 'intellectual property rights service' for supply of industrial drawings and other technical documents which have been imported by the appellant by filing of bills of entry and by payment of appropriate customs duty thereon. The impugned order deserves no merits and accordingly the same is set aside - Appeal allowed.

Summary

Issues:
Service Tax on import of industrial drawings and technical documents under the category of 'intellectual property rights service'.

Analysis:
The appellant, a manufacturer of Ferro alloy products, imported industrial drawings and technical documents for installation of a power plant. An audit revealed the expenditure on import, leading to a demand for Service Tax under 'intellectual property rights service'. The appellant contested the demand, citing a precedent where similar imports were held not liable for Service Tax. The Tribunal examined the issue and referred to the precedent involving designs and drawings for a factory project. It was established that since customs duty was paid on the imported goods, they could not be considered taxable under 'intellectual property services'. Consequently, the Tribunal ruled in favor of the appellant, setting aside the demand for Service Tax. The impugned order was deemed unsustainable, and the appeal was allowed with consequential relief.

This judgment clarifies the applicability of Service Tax on the import of industrial drawings and technical documents under the category of 'intellectual property rights service'. It emphasizes the distinction between goods subject to customs duty and services taxable under intellectual property rights. The decision reinforces the principle that if customs duty has been paid on imported goods, they cannot be additionally taxed as services under intellectual property rights. The Tribunal's reliance on precedent and interpretation of relevant provisions highlights the importance of consistency and legal precedent in tax matters. The ruling provides clarity on the tax treatment of similar imports, ensuring uniformity and predictability in tax assessments related to intellectual property services.