9911796707
TMI Blog2009 (1) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ided technical assistance to LGB for manufacture of automotive chains and associated equipment such as tools. LGB paid royalty @ 5% / 8% of sale price of chains for local sale/export as well as separate technical know how fees as mutually agreed. The lower authorities found that BEGELB had rendered consulting engineer's service as the agreement had envisaged provision of, inter alia, the following: (1) review and supervision of both design and construction. (2) assistance rendered in establishing cost effective manufacturing of automotive silent chain. (3) providing consultancy on upgradation of technology in use by LGB (4) providing technical and commercial advice on marketing. (5) providing instruction and training for LGB's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, in the USA, certifying the status of the appellant as a proprietorship concern or a firm, as directed by this Tribunal. She submits a copy of the website of BEGELB which describes the appellant as a private company. She submits that the possible conclusion was that BEGELB had been a proprietorship concern. As regards the merits of the case, she relies on the following case law. 1. Motherson Automotive Tech & Engg. v. CCE, Chennai-III - 2008 (12) S.T.R. 377 (Tri.-Chen.) 2. Same Engines India (P) Ltd., v. CCE, Chennai - 2006 (3) S.T.R. 601 (T) = 2005 (186) E.L.T. 247 (Tri.-Chen.) It is submitted that the main grounds taken in the appeal are that the service rendered as per the agreement was one of transfer of intellectual property right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chain. 5. It will provide technical consultation on upgradation of technology. 6. It will provide technical and commercial advise and counsel on how to market the products. 7. It will visit offices and factories of LGB on quarterly basis for this purpose. 8. It will provide technical know-how for a fee of US$ 9,85,000. 9. LGB has to pay 8% & 5% respectively of the sale price of the chains for export and domestic sale as royalty for 7 years to BEGELB under this technology transfer agreement. I find that the agreement envisages provision of technical know how to manufacture automotive chains and ancillary equipment for the purpose. In order to effectuate the object of the agreement BEGELB also trained LGB's staff and visited its fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed design, construction, commissioning and running of a project which also includes training of manpower, trouble shooting, and establishing system etc. A transaction in intellectual property along with the right to manufacture the licensed product is totally different from the technical assistance rendered by an engineer or a firm of engineers. When intellectual property services was brought under the tax net without altering the scope of "Consulting Engineer service", the new impost covers an activity hitherto not exigible to service tax under the head "Consulting Engineer". The impugned services are appropriately classifiable under intellectual property service and not under consulting engineer's service. The material period for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echnical know how fees quarterly since July, 1997. This was found to be consideration for engineering consultancy received by LGB. The Tribunal had held in Diebold Systems (P) Ltd. v. CST, Chennai reported in 2008 (9) S.T.R. 546 (Tri.-Chen.), as follows: "Introduction of a new entry for the purpose of levy of tax presupposes that it was not covered by any of the pre-existing entries. In other words, in the ever-widening sphere of service tax, addition of an item to the list of taxable services is just an addition, and not a subtraction from a pre-existing entry. This reality was noted by this Tribunal in the case of Glaxo Smithkline Pharmaceuticals (supra). In that case, certain service rendered by the company was found to be in the catego ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
