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TMI Blog2024 (3) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... show-cause notice wherein it is made clear that the respondent has transferred the entire polymer division as a slump sale to SIPPL and accordingly the Tribunal has rightly observed after analysing the provisions of Section 65 pertaining to the definition of scientific or technical consultancy under Section 65(92) and intellectual property service as per Section 65(55b) of the Finance Act, 1994 read with the definition of slump sale as per Section 2(42C) of the Income Tax Act, 1961 has rightly held that in case of slump sale, there is no question of providing intellectual property service or scientific or technical consultancy as alleged by the appellant. The facts narrated in the impugned order of the Tribunal are not in dispute and in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abilities for license fees, royalties, or infringement claims related to patents, trade secrets, copyrights, trademarks, service marks, or other proprietary rights? (b) Whether the findings are based on no evidence and/or while arriving at the said finding, relevant, admissible evidence has been taken into consideration? Whether technical aspects are considered and law is applied? 2. The brief facts of the case are that the respondent-Gharda Chemicals Limited was engaged into polymer business through its Polymer Division located at Panoli, District Bharuch. The respondent sold its Division as going concern for a lump sum price and accordingly, entered into a sale and purchase agreement dated 14th December, 2005 with M/s. Solvay Specialities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g applied for. The appellant, therefore, was of the opinion that that the technical knowledge supplied for manufacturing if unregistered products comes under technical know-how and comes under the purview of Intellectual Property Services as per Section 65(105)(zzr) of the Finance Act, 1994. The respondent was, therefore, put to notice for payment of service tax on such transfer of Intellectual Property Services on the ground that it supplied their own invention and scientific discovery without clarification and bifurcation of the value in the sale and purchase agreement. 2.4 Such notice was issued after recording statement of the authorised personnel of both the companies. Pursuant to the show-cause notice dated 21st October, 2011 for call ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2(h) of the Central Excise Act, 1944 and as per the said definition, sale and purchase means any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. It was, therefore, submitted that the patent and trademark which was transferred by the respondent cannot be considered as goods as referred to in the definition of sale as provided under Section 2(h) of the Central Excise Act, 1944. It was, therefore, submitted that the transfer of patent and trademark is nothing but intellectual service as defined under Section 65(55b) of the Finance Act, 1994. 3.1 It was further submitted that the respondent by transferring trademark and pate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under. 8. From the argument made by both sides as well as on perusal of records, we find that the main issue that arises for consideration is whether the patent and other technical know-how transferred to M/s SSIPL under sales purchase agreement as a going concern would fall within the ambit of taxable service of Scientific or technical consultancy Service and 'Intellectual property right service as defined under Section 65(92) and 65(55b) of Finance Act, 1994 and liable for payment of service tax. For better appreciation, the said provisions are reproduced as below :- Section 65(92) scientific or technical consultancy means any advice, consultancy, or scientific or technical assistance, rendered in any manner, either directly or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy or scientific or technical assistant has been given by the seller to the buyer. 10. We also find that so far as providing of intellectual property service is concerned, from the definition of said service it is clear that there is rendering of service only if there is temporary transfer of some intellectual property or permitting its use. In the present matter from the facts of the case there does not seem to be any temporary transfer of intellectual property. In the present case whole Polymer division itself was sold by the Appellant to M/s SSIPL as going concern. 11. From the above discussion, we are of the considered opinion that the disputed transaction of appellant will not fall within the definition of Scientific and Technical Con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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