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TMI Blog2014 (1) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... intellectual property rights and no consultancy or advice was involved and hence the same was not liable to service tax under consulting engineer service. Further the Government has specifically covered this service for levy of service tax with effect from 10/09/2004 under Section 65 (55b) of the Finance Act, 1944 as ‘Intellectual Property Service’ the definition of ‘Intellectual Property Service’ given under clause (55b) of section 65 is very specific and cover within its ambit, the sale of intellectual property right or transfer or just giving right to the other person for the use or enjoyment of any intellectual property right. Therefore the technical knowhow provided by the Licensor could not be termed as advice or consultancy. Simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest and penalty should also not be imposed. The demand was in respect of technical collaboration agreement and royalty paid to Hitachi Japan. The said SCN was adjudicated vide impugned order wherein the adjudicating authority has considered the services received by the appellants as taxable service under the category of Consulting Engineer under Section 65 of the Finance Act, 1994 (32 of 1994) and confirmed the demand of Rs.4,47,282/- for the period of Sept-2004 under Section 73 of Finance Act, 1994 for services received by them. He also imposed penalty of Rs.4,47,282/- on them under Section 78 of the Finance Act, 1994 and demanded interest at the applicable rate under Section 75 of the Finance Act, 1994. Being aggrieved with the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Technical knowhow provided under License Agreement Dated 10/04/1998 on which no Service Tax has been paid. The appellants have paid this amount to Licensor for its disposal of valuable information and know how, technical information and technical assistance relating to window type and split type room air conditioner and Licensor had agreed to grant Licensee the exclusive rights and Licensee to utilize the trade secrets on payment of lum sum fees and royalty as per the agreement. The Hon ble Tribunal in case of Navinon Ltd. v/s. CCE - 2004 (172) E.L.T. 400 (Tri. Mum.) has held that the payment of royalty for technical knowhow was not payment for any service and royalty was a share of profit reserved by the Licensor to use his property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries Ltd. -2006(2) STR 116(Tri. Bang.) c) Araco Corporation V/s CCE, Bangalore - 2005(180) ELT 91(Tri. Bang.) Therefore, the technical knowhow provided by the Licensor cannot be equated with any service covered under consulting engineering service for Sep 2004 and hence the service tax demanded and confirmed on royalty under consulting engineering service is set aside. 6. Since I have held that technical knowhow provided by the foreign company was not chargeable to service tax under the consulting engineering service and the demand have already been set aside, obviously the penalty under Section 78 and the interest under Section 75 is also set aside. 7. On perusal of the above said findings, it can be seen that the first appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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