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TMI Blog2015 (2) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... d liabilities. The said agreement was entered in 1988-89; consideration for such sale of transfer of business to M/s. Universal Medicaments Pvt. Ltd was lump sum consideration as well as the amounts to be paid as royalty. Consequent to such transaction, the Revenue authorities were of the view that the said amounts received by the appellants are taxable under "scientific or technical consultancy service". Hence, they issued a show-cause notice demanding service tax, interest thereon and sought to impose penalties. The adjudicating authority after following the due process of law confirmed the demands along with interest and imposed penalties. On an appeal, the first appellate authority also upheld the orders-in-original. 4. Learned CA appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale may not be covered under "scientific and technical consultancy service". 5. Learned DR on the other hand draws our attention to the definition of scientific and technical consultancy services and submits that the said definition talks about the services rendered on any scientists or technology institution or organisation. It is his submission that the appellant being an organisation has sold the technical know-how as also the technical staff to the Universal medicaments Pvt. Ltd. and they are also giving technical assistance it would be covered under the category of "Scientific or Technical Consultancy". It is also submitted that the royalty amount which has been paid is an amount connected to the manufacturing activity and also for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "6. We have carefully considered the submissions from both sides. We also perused the agreement and the show cause notice. In the show cause notice it is alleged that the appellant was granted exclusive right to manufacture, use and sell within the territory, the preparation utilizing the know how and scientific and technical information and the teachings of the patents on payment of royalty. It is also alleged in the show cause notice that the appellant was receiving know-how during the disputed period. However, from the agreement it is noticed that there is no evidence of continuous providing of information, know-how in relation to the manufacture. Further, it is not disputed that the appellant was manufacturing and selling products in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994 as: "Scientific or technical consultancy" means any advice, consultancy, or scientific or technical assistance, rendered in any manner, either directly or indirectly, by a scientist or a technocrat, or any science or technology institution or organization, to any person, in one or more disciplines of science or technology". 4. The appellant herein is a manufacture of textiles and by no stretch of imagination, it can be perceived that the appellant is a science or technology institution or organisation. Therefore, the appellate Commissioner is right in holding that the service rendered by the respondent in this case does not fall within the purview of taxable service of Scientific and Technical Consultancy." 9. In view of the foregoi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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