2015 (1) TMI 187

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..... ct of this case is that whereas the show cause notice was issued in September 2003, the royalty on account of technical services for the years 2000-2001 and 2001-2002 was paid in 2004. This fact has been also certified by the Chartered Accountant and not controverted by Revenue. The service tax provisions under the Service Tax Rules, 1994, as applicable during the period in dispute, clearly provided that service tax is payable when the value of taxable services is received. The relevant provisions in law was Rule 6(1) which stated that service tax is payable when payments are received towards the value of taxable services. Therefore, clearly service tax was not leviable on royalty paid for the years 2000-2001 and 2001-2002. Having held that .....

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..... amount of the demand. He confirmed the demand on royalty for the years 1999-2000, 2000-2001, 2001-2002 and on the development expenses incurred in India for converting the know how into manufacturing facility. The demand on account of royalty paid by the appellants was confirmed treating the same as a service under the category of Consulting Engineer Service. 3. Heard both sides. 4. The Ld. Sr. Advocate for the appellants mentioned at the outset that there is a plethora of judgments which have held that Consulting Engineer Service by its very definition relates only to Consultancy provided by a firm', as the service was defined during the period in dispute. And the appellants are not covered by the term firm'. Secondly, he .....

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..... have furnished a certificate from the Chartered Accountant certifying that the amount relates to expenses for completing the technology into manufacturing facility and the same have been incurred by the appellants and no payment has been made to SII. The Commissioner's order is very vague and without reasoning. We have no hesitation in holding that service tax is not payable on the development expenses. 7. We have gone through the Technology Licensing Agreement. We find that under Article 5 technical services are indeed to be rendered to the appellants by way of training of personal, selection of suppliers of machinery, for commissioning and testing of the plant and machinery as well as for testing of samples of products for inspect .....

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