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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 ..... ational India Pvt. Ltd. Versus CST, New Delhi [2013 (10) TMI 1161 - CESTAT NEW DELHI] referred, where the Tribunal had occasion to analyse the dispute relating to cartoon characters. The assesse therein contended that these cartoon characters are artistic work and covered under copyright. Whereas, the Revenue alleged the same to be Trademark and raised the demand under IPR services - After analysing the definition of copyright and trademark, the Tribunal held that such cartoon characters fall under copyright only - The facts being similar in our view, the said decision is applicable to this case. Appeal allowed - decided in favor of appellant. - ST/440/2009 - Final Order No.43276/2017 - Dated:- 13-12-2017 - Ms. Sulekha Beevi, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri P. C. Anand, Consultant for the appellants Shri B. Balamurugan, AC (AR) for the respondent ORDER Per Bench The appellant which is a partnership firm deals in Consumer Durables, Health Care Products etc. They are registered with the Service Tax Department for various services such as C F Agency service, Business Auxiliary Service and Renting of Immovable Prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax alleging the logo to be a trademark. That since the logo is registered as a copyright, the same cannot be considered as a trademark. 2.2 A perusal of the licensing agreement would make it clear that the use of the logo ttk does not serve the function of the trademark. As per Section 2 (b) of the Trademark Act, the trademark is which is capable of being represented graphically and which is capable of distinguishing the goods or services of one person form those of others. The logo ttk is not in any way connected to the goods in question, as the goods have their own trademarks (such as Kohinoor etc.) which serve the purpose of distinguishing themselves from the goods of another person. The licensees of the appellant use the logo ttkin production and marketing, promotion advertisement, packaging, labelling, distribution, and sale of the products. The purpose is to denote the source and origin of the goods. The subsidiary companies of the appellant who have the license to use this logo already have their own brands to market their goods. The copyrighted impugned logo is not applied for a trademark purpose. The function of the appellants is clear from Section 5.1 of the Licensi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment had issued a letter requiring the appellants to pay service tax on the royalty income, based on the copy of the agreement furnished by the appellants. Vide letter dated 10.06.2006, the appellants replied stating that the said logo is not a trademark but a copyrighted artistic work and that the appellant is not liable to pay service tax under IPR services on the royalty income. In spite of this knowledge, the department has issued the SCN only in 2008 invoking the extended period of limitation alleging suppression of facts. The appellant has produced all necessary documents to the department and reflected the payment of service tax in the returns as well as payment of VAT in their VAT returns. Therefore, such allegation is without any factual basis. The Ld. Consultant pleaded to set aside the impugned order. 3.1 Against this, the Ld. AR, Shri B. Balamurugan, AC reiterated the findings in the impugned order. He adverted to the terms and conditions in the agreement which have been reproduced in para-5 of the impugned order. He submitted that in the agreement the appellants have described the logo as a trade name and not as a copyright. In the agreement license and permissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided to any person, by the holder of intellectual property right, in relation to intellectual property service. The term Trade Mark has been defined under clause (2b) of Section 2 of Trade Mark Act, 1999 Section 2(b) trade mark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and (i) in relation to Chapter XII (other than Section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and (ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph of any image forming part thereof; (ii) to sell or give on hire or offer for sale or hire, any copy of the film, regardless of whether such copy has been sold or given on hire on earlier occasions; (iii) to communicate the film to the public; (e) in the case of a sound recording, - (i) to make any other sound recording embodying it; (ii) to sell or give on hire, or offer for sale or hire, any copy of the sound recording, regardless of whether such copy has been sold or given on hire on earlier occasions; (iii) to communicate the sound recording to the public. Explanation - For the purposes of this section, a copy which has been sold once shall be deemed to be a copy already in circulation. Section 2(c) Artistic work means - (i) a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality; (ii) work of architecture; and (iii) any other work of artistic craftsmanship. 5.2 As seen above, the definition of IPR service excludes copyright. Undisputedly, the appellants have registered the logo ttk under the Copyright Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Pvt. Ltd. (supra) , the Tribunal had occasion to analyse the dispute relating to cartoon characters. The assesse therein contended that these cartoon characters are artistic work and covered under copyright. Whereas, the Revenue alleged the same to be Trademark and raised the demand under IPR services. The main contention made by the Revenue in the said case was that in the sub-licensing agreement as well as in the product licensing agreement, promotional licensing agreement and other agreements, the property shown in the schedule powerful girlshad been referred as trademark. After analysing the definition of copyright and trademark, the Tribunal held that such cartoon characters fall under copyright only. The facts being similar in our view, the said decision is applicable to this case. Further, in the present case, the logo is registered under the Copyright Act. Relevant portion of the decision in the case of ESPN Software India Pvt. Ltd. is reproduced as under:- 38. Product Licensing Agreement and Promotional Licensing Agreements were executed between TENA and TIIPL. TIIPL i.e. Appellant No. 2 executed sub-licensing agreements between TIIPL and Bombay Dyeing and M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier the first part of the Explanation widens the ambit of the entry by extending it to any drug or medicinal preparation for use in internal or external administration for prevention of ailments in human beings or animals. But then it narrows it by restricting the applicability of the tariff item to only such medicines which bear either on itself or on its container or both a name which is not specified in a monograph in a Pharmacopoeia. This obviously is not applicable to the appellant as the injections manufactured by the appellant are specified in a Pharmacopoeia. The other class of medicines to which this Explanation applies are those which have a brand name that is a name or a registered trade mark under a Trade Merchandise Marks Act. The medicine manufactured by the appellants is not registered under the Trade and Merchandise Marks Act. Therefore, it would attract levy only if its container or packing carried any distinctive marks so as to establish the relation between the medicine and the manufacturer. But the identification of a medicine should not be equated with the produce mark. Identification is compulsory under the Drug Rules. Technically, it is known as `house ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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