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TMI Blog2009 (1) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... or assistance – revenue appeal dismissed - ST/309/2005 - A/28/2009-WZB/AHD - Dated:- 6-1-2009 - Ms. Archana Wadhwa, Member (J) and Shri B.S.V. Murthy, Member (T) Shri Sameer Chitkara, SDR, for the Appellant. Shri S. Ruparel, C.A. , for the Respondent. [Order per : B.S.V. Murthy, Member (T)]. - M/s. Ambalal Sarabhai Enterprises Ltd. (ASE in short) entered into an agreement dated 19 October 1999 with Sarabhai Piramal Pharmaceuticals Pvt. Ltd. (SPPL in short.) and another agreement dated the 18th of June 2000 with Sarabhai Zydus Animal Health Ltd. (SZ for short) for permanent transfer of know-how at a consideration of Rs. 20 Crores and Rs. 28 Crores respectively. The Revenue took up investigation of these agreements which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible. The benefits emanating therefrom, shall be shared equally between ASE and SPPL. As regards the second agreement, he referred to clause 7 of the agreement of the shareholders dated 29th January, 2000. He submits that there is a provision that the agreements shall be for a period of two years and upon completion of two years, the joint venture Company shall be free to renew, modify or terminate these agreements. According to the revenue, the provision to set up a task force shows that with the transfer of know-how, the agreement is not complete, but requires further consultancy services to be provided. In relation to the second agreement, the agreement is valid for two years and thereafter it is optional to continue or not. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of know-how by respondents. The learned advocate, also relied upon the circular issued by the Ministry of Finance vide letter F. No. B 2/8/2004-TRU dated at 10 September, 2004 wherein it has been clarified that a permanent transfer of intellectual property rights does not amount to rendering of service. The permanent transfer of intellectual property right does not amount to rendering of service, requiring respondents to pay service tax on consideration received for such permanent transfer of know-how, which is nothing but intellectual property. He also submitted that the respondents case that transfer of know-how is not chargeable to service tax is vindicated by insertion of new category of services of intellectual property service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evied or show cause notice has been issued for levy, extended period, cannot be invoked in respect of the agreements which are under consideration in the appeals filed by the revenue now. He relies on the case of Hyderabad Polymers Pvt. Ltd., reported in 2004 (166) E.L.T. 151. He also submits that all the details had been submitted by them to the Deputy Commissioner from time to time and again on the 10th September, 2003 during the visit of Deputy Commissioner. Therefore, 12th of September, 2003 has to be considered as relevant date for the purpose of Section 73 of the Finance Act, 1994. Therefore, the show cause notice is barred by limitation. 3. We have considered the rival submissions in detail. The appeal filed by the Revenue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set up jointly amounted to rendering technical advice and formed part of the sale of the technical know-how. There is no relationship of service provider, and the receiver between the parties to the transaction in the implementation of supplementary agreement. As regards the second agreement, the staff which was employed for the purpose of marketing, accounting management etc. were transferred and we are not able to appreciate how these amounted to rendering the technical advice or assistance. If the contention of the Revenue is accepted, mere transfer of staff in one company to another, would amount to rendering the consulting engineering services. Further, the question also arises as to what the respondents should have done with the staf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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