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TMI Blog2018 (1) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... tant, Shri P.C. Anand opened his arguments by referring to the definition of IPR Services, and that of Trademark, copyright etc. He submitted that the said logo is registered as a copy right. The definition of IPR service under Section 65(55a) of the Finance Act, 1994 means any right to intangible property viz., trademarks, designs, patents or any other intangible property under any law for the time being in force but, does not include copyright. That the said logo having been registered as a copyright that the transfer of use of the logo would not come under the definition of IPR services and levy of service tax thereon is not attracted upon the royalty income received by the appellants. The Ld. Consultant submitted that the impugned logo ttk is artistic in nature and thus inherently protected and classified as a copyrighted work. Section 13 of the copyright Act specifically states that copyright shall subsist in original literary, musical and artistic works. Further, the term artistic work is defined in Section 2 (c) as a painting, sculpture, drawing and engraving or a photograph, whether or not any such work possesses artistic quality. The appellants are Business conglomerate an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the impugned logo is purely being used by the licensees as a copyrighted work and not as a trademark. The appellants group companies, as to the logo ttk is present in their company name, have the right to use the same as a corporate name. The only permission taken from the appellants as per the agreement is for the artistic representation of the logo. Therefore, necessarily the use of logo is strictly a copyright. 2.3 Ld. Consultant relied upon the decision in M/s.ESPN Software India Pvt. Ltd. Vs. CST, New Delhi - 2014 (35) STR 927 (Tri.-Del.), where the Tribunal held that the cartoon characters are artistic work and would fall under Copyright Act and not under the Trademark Act, as alleged by the department. The case of Imagic Creative Pvt. Ltd. Vs. Commissioner of Commercial Taxes - 2008 (9) STR 337 (S.C), was relied upon the Ld. Consultant to contend that VAT and service tax are mutually exclusive. That the appellant has discharged VAT on the royalty income received and therefore, the same amount cannot be subject to levy of service tax. That though documents were furnished before the adjudicating authority contending that VAT has been paid on the royalty income, same wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the logo does not have any artistic value. He adverted to the definition of artistic work in Section 2 (c) of the Copyright Act, 1957 and submitted that the logo is merely a picturised calligraphy of the letters and would not come under the definition of artistic work. That therefore the said logo would more properly fall under the Trademark Act than Copyright Act. The Ld. AR stressed that the appellants have permitted to use logo in relation to the goods manufactured and marketed by the licensee besides in relation to other business activities of the licensee. When such logo is used in relation to the products manufactured, marketed, promoted, packed, and sold, the logo would attain the nature of the Trademark. Therefore, the transfer of the permission to use the logo which is a trademark would fall under IPR services. 3.2 With regard to the issue of limitation, he submitted that though a letter was issued by the department dated 29.05.2006, demanding the appellant to pay the service tax on the royalty income, the appellants failed to discharge the service tax liability. Only after investigation, the amount could be quantified and therefore the SCN issued invoking the extende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely :- (a) in the case of a literary, dramatic or musical work, not being a computer programme, - (i) to reproduce the work in any material form including the storing of it in any medium by electronic means; (ii) to issue copies of the work to the public not being copies already in circulation; (iii) to perform the work in public, or communicate it to the public; (iv) to make any cinematograph film or sound recording in respect of the work; (v) to make any translation of the work; (vi) to make any adaptation of the work; (vii) to do, in relation to a translation or an adaptation of the work, any of the acts specified in relation to the work in sub-clauses (i) to (vi); (b) in the case of a computer programme, - (i) to do any of the acts specified in clause (a); (ii) to sell or give on commercial rental or offer for sale or for commercial rental any copy of the computer programme; Provided that such commercial rental does not apply in respect of computer programme where the programme itself is not the essential object of the rental. (c) In the case of an artistic work, - (i) to reproduce the work in any material form including depiction in three dimensi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Levokast, Apiverin-M, Prestige etc., are the registered trademark. The packets also contained the logo. Such logo is used not only on the packets but also in the letterheads of the Company. Some of the samples are as under:- 5.3 From the above documents it is seen that the goods do have a separate trademark such as Levokast, Apiverin-M, Prestige etc. Apart from this, the packings also contain the ttklogo. Thus, though the goods use the logo, it cannot be said that it is a trademark for these goods, as these goods have separate registered trademark. Again, the appellants have registered the logo under the Copyright Act. Any infringement of right pertaining to the logo would fall under Copyright Act and not under Trademark Act. The provisions of Copyright Act describe the situations of protection afforded to the copyright. This is different from the rights attached to a trademark. The logo being registered as a copyright, in case of infringement of the same, the right falls within the Copyright Act and would be enforceable by the appellants under the said Act only and not under the Trademark Act. The arguments put forward by the Ld. AR that the depiction of logo does not have any ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts PPG, Dexters Laboratory, Johney Bravo, etc. and all the related Characters and Elements are shown as Trademark of Cartoon Network. Similarly in case of Bata India sub-licences property is Ben 10to be used for promotion of Bata School Shoes, shoe accessories and school bags. From Schedule A of the agreement it is clear that Character and Elements are shown as Trademark of Cartoon Network. 39. On going through the definition of artistic work as defined under Section 2(c) of the Copyright Act, 1957, we find these Characters and Elements are covered under clause (i) as these come within drawing, engraving or a photograph. 40. In view of the above, we are of the view as these characters fall within the definition of artistic work in Section 2(c) of the Copyright Act are hence excluded from the definition of Intellectual Property. The demand confirmed is therefore unsustainable." 5.5 The appellants have also argued that they have discharged VAT on the entire royalty income. VAT and service tax being merely exclusive a further demand on the royalty income is not sustainable. The Hon'ble Apex Court in the case of IMAGIC Creative Pvt. Ltd. (supra), had categorically held that payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re ordered only by the product mark or brand name. The house mark serves as an emblem of the manufacturer projecting the image of the manufacturer generally." The `APor `Astraon the container or packing was used to project the image of manufacturer generally. It did not establish any relationship between the mark and the medicine. For instance, if the appellant instead of using Dextrose injections would have described it as Astra injections or Astra Dextrose injections then it could be said that a relationship between the monograph and the medicine was established. In the case of appellant it was only a monograph to identify the manufacturer. The Hon'ble Apex Court thus held that such mark does not establish any relationship to the product and the monogram was used to identify the manufacturer only. 6. From the above discussions, and following the position of law laid in the case of ESPN Software India Pvt. Ltd. (supra) as well as Imaic Creative Pvt. Ltd. (supra), we are of the view, that the impugned order cannot sustain and requires to be set aside, which we hereby do. The appeal is allowed with consequential relief, if any, to the appellants. (Operative part of the Order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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