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TMI Blog2019 (11) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... y High Court in the case of Indian National Shipowners Association vs. UOI [ 2008 (12) TMI 41 - BOMBAY HIGH COURT ] where it was held that Before insertion of section 66A with effect from 18-4-2006, there was no authority to levy service tax on Import of service - thus, no service tax can be fastened to the appellants before 18.4.2006. Accordingly, it is to be held that the appellants are liable to pay service tax of ₹ 48,76,268/- for the period April 2006 to March 2007 - decided against Revenue. Classification of services - technical knowhow received from their related foreign entity for the period 16th August 2002 to 31st March 2007 - demand of service tax, however, the demand on the same was under the heading Consulting Engineering Services for the period 16.8.2002 to 9.9.2004 for an amount of ₹ 92,74,747/- and under Intellectual Property Services for the period 10.9.2004 to 31.3.2007 - HELD THAT:- The payments are made for technical knowhow, training, etc., and not for the use of logo. Though, the use of logo is permitted in terms of the agreement unless a specific payment is made for the same, it cannot be said that the appellants have availed any trademark in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65,503/-) and service tax of ₹ 48,76,268/- was deposited for the period 1.4.2006 to 31.3.2007 (out of ₹ 65,94,694/-). He submits that in view of the judgment of the Hon ble Bombay High Court in the case of Indian National Shipowners Association vs. UOI: 2009 (13) STR 235 [affirmed by Supreme Court 2010 (17) STR J57 (SC)] import of services are taxable in India only with effect from April 18, 2006 i.e., the date on which Section 66A was inserted in the Finance Act. The decision has been followed by Karnataka High Court and the Tribunal in the cases of CST vs. Toyoda Iron Works: 2010 (19) STR 802 (Kar.) and M/s. BHEL-Gs Turbine Services Pvt. Ltd. vs. CST, Hyderabad: 2010 (20) STR 679 (Tri.-Bang.). 3. Learned AR for the Department has reiterated the impugned order. He submits that there is no dispute regarding the receipt of taxable services from the foreign service provider; Section 68(2) of the Finance Act, 1994 empowers Central Government to specify the manner of payment and liability of persons to make payment; Rule 2 (1) (d)(iv) with effect from 16.8.2002 mandates the manner and mode of payment of service tax; and that legislative intent is very clear to recover servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not within the purview of Intellectual Property Services . 7. The learned AR for the Department has reiterated the findings of Orders-in-Original and submitted that as observed by the Commissioner in the impugned orders, the appellants are using the logo of the parent company and as such, the same should be treated as Intellectual Property Services availed. Learned counsel for the appellants in a rejoinder submits that in terms of the agreement the transfer of knowhow is in terms of para 4 and 5 of the agreement and the use of trademark and logo, etc., is as per para 10 of the agreement. However, in terms of the exhibit 4 to the agreement, payment is only in respect of technical knowhow, training and technical assistance and royalty and not in respect of use of logo. Therefore, the argument on the use of logo has no relevance to the issue. He further submits that in view of the case of ABB Ltd. (supra), the service tax cannot be demanded on Intellectual Property Services. He relies upon the following cases: Shore to Shore MIS Pvt. Ltd. vs. CCE: 2007 (5) STR 109 (Tri.-Chennai) Modi Mundipharma Pvt. Ltd. vs. CCE: 2008 (12) STR 189 (Tri.-Del.) Suolifico Chennai vs. CST: 2008 (11) ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellants have availed any trademark in terms of the service tax law. We find that this Bench in the case of ABB Ltd. (supra) have held that : 7.1 After considering the submissions of both the parties and perusal of the material on record, we find that the appellants have paid the royalty/license fee to M/s. ABB Technology Ltd., Zurich, Switzerland towards the receipt of technical know-how and as per the licence agreement, the foreign companies are making available to the appellant knowledge by means of data, experience, for the purpose of manufacture, sale and use of the contract product and the providing of know-how is not a service which is taxable under the category of Intellectual Property Right service. Further in order to find whether the service rendered by the foreign companies to the appellant falling under the definition of Intellectual Property Right service, we would like to refer to the definition of Intellectual Property Right and the corresponding taxable service concerning Intellectual Property viz. Intellectual Property service as defined in the Finance Act, 1994. These definitions are given below :- 6.5.1 Intellectual Property Right as defined under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , copyrights, trademarks and designs. The definition of taxable service includes only such IPRs (except copyright) that are prescribed under law for the time being in force. As the phrase law for the time being in force implies such laws as are applicable in India, IPRs covered under Indian law in force at present alone are chargeable to Service Tax and IPRs like integrated circuits or undisclosed information (not covered by Indian law) would not be covered under taxable services. 9.2 A permanent transfer of intellectual property right does not amount to rendering of service. On such transfer, the person selling these rights no longer remains a holder of intellectual property right so as to come under the purview of taxable service. Thus, there would not be any Service Tax on permanent transfer of IPRs. 9.3 In case a transfer or use of an IPR attracts cess under Section 3 of the Research and Development Cess Act, 1986, the cess amount so paid would be deductible from the total Service Tax payable (refer Notification No. 17/2004-S.T., dated 10-9-2004). 7.2 If we examine the definition of Intellectual Property service as given in Section 65(55a) (55b) and also see the circular issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions relied upon by the appellant cited supra, this issue is no more res integra and has been settled by various decisions of the Tribunal that there cannot be any Service Tax on technical know-how. Therefore this issue is decided in favour of the appellant and the demand of Service Tax to the tune of ₹ 6,28,85,949/- is set aside. Further as far as technical testing and analysis services are concerned, though the appellant had challenged the same but during the course of argument, the Learned Counsel for the appellant submitted that they are not challenging the same. Further as far as commercial training or coaching services are concerned, the Learned Counsel submitted that the appellant had made the payment to M/s. ABB Technology Ltd. Zurich, Switzerland in connection with the participation of the employees of the appellants in a seminar conducted by the foreign company at a place outside India. Appellant has also submitted that 4 of their employees attended IMD Finance Business Control Seminar from 4-3-2007 to 16-3-2007 at Lusanne conducted by M/s. ABB Ltd., Zurich and the appellant has paid in aggregate ₹ 15,69,846/- to the foreign company. The seminar was exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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