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TMI Blog2016 (10) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... only after enactment of Section 66A, w.e.f. 18-4-2006, that taxable services received from abroad by a person belonging to India are taxed in the hands of the Indian residents. In such cases, the Indian recipient of the taxable services is deemed to be a service provider - the demand relating to the period prior to 18th April 2006 does not have the authority of law. Demand for the period after 18-4-2006 - Section 65(105)(zzr) - section 65(55a) - copyright outside the scope of ‘intellectual property service’ - Held that: - Section 65(105)(zzr) has been invoked in the notice but the nature of ‘technical knowhow’ transferred to appellant from among trade mark, design, patent etc. has not been identified. Likewise, it has not been establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 2nd March 2007. The adjudicating authority did not accept the contention of the appellant that they are in receipt of information technology service and held that the service rendered is that of intellectual property service as it was technology that was transferred against payment based on downloads made by subscribers of the appellant using the service of the provider. Reliance was placed on the decision of the Tribunal in Araco Corporation v. Commissioner of Central Excise [2005 1 STT 116 (CESTAT)] holding that transfer of technical knowhow is in the nature of rendering of intellectual property service . It was also held that copyright is not involved as both hardware and software technology is used to service the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Learned Authorized Departmental Representative reiterated the contentions in the impugned order to justify the confirmation of demand and the imposition of penalties. 5. Demand of tax on the payments effected by appellant to service provider from abroad for facilities used in rendering service to their customer has been confirmed as payable under reverse charge mechanism . The impugned order has relied upon rule 2(1)(d)(iv) of Service Tax Rules, 1994 as the authority to effect the levy and having noted the substitution of that provision on 19th April 2006, relied upon the decision of the Hon ble Supreme Court in Government of India v. Indian Tobacco Association [2005 (187) ELT 162 (SC)] to hold that the substitution in a statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o authority vested by law in the Respondents to levy service tax on a person who is resident in India, but who receives services outside India. In that case till Section 66A was enacted a person liable was the one who rendered the services. In other words, it is only after enactment of Section 66A that taxable services received from abroad by a person belonging to India are taxed in the hands of the Indian residents. In such cases, the Indian recipient of the taxable services is deemed to be a service provider. Before enactment of Section 66A, there was no such provision in the Act and therefore, the Respondents had no authority to levy service tax on the members of the Petitioners-association. This decision, dealing on it does, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the technical know-how received by the appellant and the royalty payment made by the appellant to Unisys is nowhere established to result from the use of any Intellectual Property Right. 4.2 We may further go on to add that the Intellectual Property Right should be a right under the Indian law. Intellectual Property Right not covered by the Indian laws would not be covered under taxable service in the category of Intellectual Property Right Services. We are fortified in our view by Board Circular F. No. 80/10/2004-S.T., dated 17-9-2004 which clarified that Intellectual Property emerges from application of intellect, which may be in the form of an invention, design, product, process, technology, book, goodwill, etc. In Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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