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TMI Blog2023 (10) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to Sicgen Singapore is protected. In absence of any clear evidence of the said knowhow being protected by any law, the same cannot qualify as Intellectual Property Right and therefore, no tax can be levied of such transfer of technical knowhow under the head of Intellectual Property Service . Thus, no tax was leviable on the said transaction under the head of IPR - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... o the appellant for rejection of the refund claim holding that the services claimed to have been exported to M/s Scigen, Singapore cannot be considered 'Export of Service' as the same were not used 'outside India'. It was argued that the said services were in turn used by M/s Scigen, Singapore in the Bio-Technical Park, Pune Maharashtra (India). He further argued that the recipient of service M/s Scigen, Singapore is located outside India. The service has been provided to M/s Scigen, Singapore with liberty to use said technical know-how anywhere in India and the payment of service is received in convertible foreign exchange. In these circumstances, under rule 3(2) of Export of Service Rules, 2005, it qualifies as 'Export of Service'. 4. Learned counsel argued that the technology supplied by them does not fall under the category of Intellectual Property Right for the reason that the said technology is not protected by any law in India. He relied on the Circular No. 80/10/2004-ST dated 17.09.2004. The aforesaid Circular prescribed as follows: "9. Intellectual property services (other than copyrights): 9.1 Intellectual property emerges from application of intellect, which may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in India. Therefore, whether the royalty paid by the appellant-assessee under Industrial Property Right agreement is liable to service tax under Intellectual Property Rights service or not. For better appreciation of Intellectual Property Right, the definition of the same is reproduced :- Section 65. Definition. - In this Chapter, unless the context otherwise requires, - (55)(a) "intellectual property right" means any right to tangible 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. "intellectual property (55)(b) service" means, - (a) transferring, {temporarily} whether permanently or otherwise; or (b) permitting the use or enjoyment of, any intellectual property right. (105)(zzr)"taxable service" means any service provided or to be provided to any person, by the holder of intellectual property right, in relation to intellectual property service. 7. On going through the said provisions of the Act, we find that, to tax under service tax, under Intellectual Property Rights, such rights should be registered with Trademark/Patent authorities. It is a fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The legal position on this issue has been examined by various decisions of the Tribunal which are as under : (a) Rochem Separation Systems (India) Private Limited v. Commissioner of Service Tax, Mumbai I - 2015 (39) S.T.R. 112 (Tri.-Mum.) [para 8]; (b) Whirlpool of India Limited v. C.C.E & S.T., Delhi - 2016-VIL-57-CESTAT-DEL-ST [para 7]; (c) Tata Consultancy Services Limited v. C.S.T., Mumbai - 2015-TIOL-2370-CESTAT-MUM = 2016 (41) S.T.R. 121 (Tri.) [para 4.1]; (d) Asea Brown Boveri Ltd. v. C.C.E & S.T., Bangalore - 2016-VIL-480-CESTAT-BLR-ST [para 6.7.1]; (e) Reliance Industries Ltd. v. C.C.E. & S. Tax, Mumbai - 2016-TIOL-1654-CESTAT-MUM = 2016 (44) S.T.R. 82 (Tri.) [para 2]. It has been held that to be categorized for service tax purpose 7. under IPR, such right should have been registered with trade mark/patent authority. In the present case, admittedly, there is no right recognized as IPR under any law for the time being in force in India. As such, there can be no provision of IPR service for tax liability on reverse charge basis." Therefore, we hold that services received by the appellant-assessee are not covered under Intellectual Property Rights services, un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he payment was [effected]."
In that circumstance also, we hold that appellant-assessee are not liable to pay service tax. Therefore, the impugned order is modified and the demand of service tax against the appellant-assessee is set aside."
The said decision of Tribunal has been upheld by Hon'ble Apex Court as reported in 2023 (385) ELT 645. It can be seen from the decision of Tribunal in the case of Munjal Showa Ltd. (supra) that to qualify as Intellectual Property Right, the said right should be protected by some law for the time being in force within India. It is seen that Revenue has not pointed out any law under which the said technical knowhow being transferred to Sicgen Singapore is protected. In absence of any clear evidence of the said knowhow being protected by any law, the same cannot qualify as 'Intellectual Property Right' and therefore, no tax can be levied of such transfer of technical knowhow under the head of 'Intellectual Property Service'. In this background, we find that no tax was leviable on the said transaction under the head of IPR and therefore, the appellants are entitled to relief as per law.
(Pronounced in the open court on 04.10.2023) X X X X Extracts X X X X X X X X Extracts X X X X
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