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TMI Blog2023 (4) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... under the service category of 'Intellectual Property Service' and transfer activity of technical know-how provided by the unit during transfer of its Polymer Division to M/s SSIPL is covered under the service category of 'Scientific Technical Consultancy Service'; which are taxable service with effect from 10.09.2004 and 16.07.2001 respectively. However from the definition of 'scientific or technical consultancy service', it is found that there should be an advice, consultancy, or scientific or technical assistant given by person or an institution to another person. In the present matter it has not been brought out by the revenue as to what advice, consultancy or scientific or technical assistant has been given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are that the appellant was engaged into polymer business through its Polymer division located at Panoli, district Bharuch. The Appellant intended to sell the said Division as a going concern, accordingly they had entered into a Sale and Purchase agreement 14.12.2005 with M/s Solvay Specialties India Pvt. Ltd. (M/s SSIPL) for sale of the division on a going concern basis for a lump sum consideration of Rs. 169,34,95,385/-. During the course of scrutiny of agreement, it appeared that they entered into agreement for transfer of all propriety invention, design, idea process, methods, right of Patent and other technical know-how in terms of sale and purchase agreement 14.12.2005. During the course of scrutiny of documents/ records s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has supplied their own invention and scientific discovers without clarification and bifurcation of the value in the sale and purchase agreement thereof. Statement of both the company personnel was recorded by the department. 2. A show cause notice dated 21.10.2011 came to be issued where-under service tax amount of Rs. 4,20,99,688/- was demanded from the appellant under Section 73 of the Finance Act, 1994 along with interest on the taxable value of Rs. 34,39,51,700/- received against the transfer of patent and technical know-how and the penal provisions as provided under Section 76, 77 and 78 of the Finance Act, 1994 have also been invoked in the show cause notice. The matter came to be adjudicated by the Learned Commissioner, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He argued that manufacturing unit of the appellant has been subjected to Excise Audit from time to time including for the period when the said disputed transaction was undertaken. Further facts that assessee has sold the Polymer division has also been disclosed in director‟s report of the audited financial results for the financial year ended on 31st March 2006, a copy of the which was duly available with the Jurisdictional excise authorities when excise audit for the relevant period was done. Hence the facts were known to the department that appellant had sold its polymer division as going concern. Hence, proviso to Section 73(1) of Finance Act, 1994 is not applicable to the assessee. 6. Without admitting the service tax liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njoyment of any intellectual property right. Intellectual property right is defined under Section 65(55a) of the Finance Act, 1994 as any right to intangible property namely, trademarks, designs patents or any other similar intangible property, under any law for the time being in force, but does not include copyright . 9. We find that the impugned show cause notice alleged that transfer activity of its Polymer Division to M/s SSIPL is covered under the service category of Intellectual Property Service‟ and transfer activity of technical know-how provided by the unit during transfer of its Polymer Division to M/s SSIPL is covered under the service category of Scientific Technical Consultancy Service; which are taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold to M/s SSIPL on ongoing basis and as a slump sale, that no services were provided by the unit to M/s SSIPL. We find that the slump sale has been one of the widely used ways of business acquisition. The concept of Slump sale was incorporated in the Income Tax Act 1961 by the Finance Act, 1999 when Section 2(42C) was inserted defining the term slump sale as follows: 'transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales'. Hence in the present matter all such transfer including the transfer of technical know-how and patent etc. are in pursuance to the slump sale and not by way providing the service. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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