9911796707
TMI Blog2007 (10) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... T. K. JAYARAMAN, TECHNICAL MEMBER ORDER [Dr. S. L. Peeran, Judicial Member.] - 1. This is a revenue appeal arising from Order-in-Appeal No. 63/2005-CE, dated 27-7-2005 setting aside the Order-in-Original No.38/2005 (ST), dated 24-3-2005. The appellant was manufacturing and clearing pharmaceutical products under different brand names. They were issued with a show-cause notice dated 1-3-2004 by Assistant Commissioner of Central Excise raising huge demands of Rs. 1.25 crores under the category of 'Consulting Engineer Service', Rs. 2,86,116 under the 'Clearing and Forwarding Agents' and Rs. 21,900 under the category of 'Scientific or Technical Consultancy Service'. The assessee had an agreement with M/s. Reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scientific or technical consultancy as they had not provided any advice, consultancy or scientific or technical consultancy to Hikal Ltd. and relied on Board Circular F. No. B/11 / 1 /2000-TRU, dated 9-7-2001. The Commissioner (Appeals) went through this entire clauses of agreement and after due consideration upheld the contentions. The Commissioner (Appeal) findings recorded are reproduced hereinbelow: Findings: I have carefully gone through the case records and the written submissions as well as oral submissions made by the appellant. It is seen that the appellants have been alleged as providing Engineering Consultancy Service and the service under the head Scientific and Technical Consultancy for the manufacture of Pharmaceut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the above, it could be seen that the ownership of the know-how for the products have been sold outright. This would mean that the appellants cease to be the owners of the know-how of the products. They cease to have any hold over the know-how of the products. This is a one time transaction and, therefore, there is no question of rendering any service to the buyers. It is not that the know-how rights continue to be with the appellants and only they have allowed the buyers to produce the goods for a certain period on payment of certain royalty or charges. Even such transactions have been held to be not amounting to rendering of Consulting Engineer Service by various appellate forums. Moreover, going by the constitution of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants do not fall under the purview of Clearing and Forwarding Agent for charging service tax under this category. Likewise, the allegation about rendering the service under the category of Scientific or Technical Services also stands unsubstantiated. In view of the above, I have to hold that lower authority had failed to substantiate that the appellants were engaged in rendering these three services. At this juncture, I have to make certain observation about the quality of the show- cause notice and the Order-in-Original. This is a high demand case and I do not think sufficient care and thought have gone into drafting show-cause notice. The show-cause notice merely alleges that the appellants were engaged in rendering vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hnology. 4. We have carefully considered the submissions and perused the impugned order. The Commissioner (Appeals) has applied his mind and has examined the agreement to uphold the contentions of the assessee. The plea that transfer of technical know-how does not come under the category of 'Consulting Engineering Services' has already been upheld by the Tribunal in the citations noted supra . The appellants were not carrying on the activity of clearing and forwarding but were receiving commission for procuring and passing on the export orders to some other company. They have not handled the goods as 'Clearing and Forwarding Agents'. Procuring orders and receiving commission would not come within the ambit of 'Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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