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TMI Blog2014 (6) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter back to the adjudicating authority with the direction to quantify the service tax leviable on the hidden component of the Consulting Engineer services provided by the appellant. 2. Shri J.C. Patel, Advocate appearing on behalf of the appellant argued that first appellate authority has incorrectly remanded the case back to the adjudicating authority. It was his case that transfer of technology under an agreement for sale of technical knowhow is only taxable whereas the appellant is not rendering any Consulting Engineer service. It was also his case that service tax on services of consulting engineer is not attracted in their case as the entire agreement was for sale of technical knowhow which would fall under Intellectual Property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neer services and accordingly remand has been correctly made by the first appellate authority. 4. Heard both the sides and perused the case records. 5. The issue involved in the present appeal is whether the services provided by the appellant can be considered to be one of the Consulting Engineer services or whether the same has to be considered as Intellectual Property Service. It is not disputed by the facts brought out by the first appellate authority that no specific amount was charged by the appellant for the services rendered as per para 3.5, 3.6 and 3.7 of the agreement for sale of technical knowhow. Even if it is presumed that the agreement for sale of knowhow also includes some element of consideration for imparting Consulting En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gued by the learned JCDR that permanent transfer of intellectual property right would not be covered by the definition of 'intellectual property service' under Section 65(55b) of the Act. This argument was made with reference to the definition of 'intellectual property service' as it stood prior to 16-6-2005. This definition reads as follows:- (55b) 'intellectual property service' means, - (a) transferring [temporarily]; or (b) permitting the use or enjoyment of, any intellectual property right. The clause 'whether permanently or otherwise' was substituted for the word 'temporarily' by the Finance Act, 2005 with effect from 16-6-2005. The learned JCDR has not claimed that the permanent transfer of intellectual property rights by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered by the members of the 1st petitioner cannot be brought to tax under that entry.????????????(Underlining added) We have also perused the Supreme Court's order in Civil Appeal No. 10227 of 2010 [UOI & Others v. Indian National Ship Owners Association & Others - 2011 (21) S.T.R. 3 (S.C.)]. The Apex Court affirmed the High Court's judgment. The learned JCDR argued that the Apex Court's judgment was not to be considered as affirmation of the view taken by the High Court in para 38 ibid. According to him, the question of law discussed in para 38 ibid was left open by the Supreme Court. But the text of the Apex Court's order does not indicate that the question of law left open is the one arising out of para 38 of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the appellant under the head 'scientific or technical consultancy' is not sustainable. Other issues like limitation, therefore, do not fall for consideration in relation to such demand of tax. 6. In view of the above it has to be held that the service provided by the appellant belong to the category of Intellectual Property Service which was made effect from 10.09.2004. As the services by the appellant were provided during the period prior to 10.09.2004, therefore, no service tax is leviable upon the appellant in the present proceeding. Accordingly appeal filed by the appellant is required to be allowed by setting aside the OIA passed by the first appellate authority. 7. Appeal filed by the appellant is allowed. (Operative part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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