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TMI Blog2024 (4) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 75 and imposition of penalty under Sections 76, 77 and 78 of the Act. 3. The two-fold questions involved in the present appeal are the following: - (i) Whether the Appellant is liable to pay service tax on the license fees and other incidental expenses paid to the Russian Company i.e. M/s. Rosboronexport, Moscow, Russia towards transfer of technical knowhow and technical assistance for manufacture of aircraft & engines under the category of "Intellectual Property Services"? (Service Tax demand amounting to Rs. 23,72,60,000/-) (ii) Whether the Appellant is liable to pay service tax on amount received from the Malaysian company i.e. M/s. Setia Technologi SDN, BHD, Malaysia against repair/rectification of MIG Engines? (Service Tax demand amounting to Rs. 2,75,56,000/-) 3.1 During the course of audit undertaken by the Department, it was pointed out that the appellant were liable to pay Service Tax under reverse charge mechanism (RCM), towards expenses incurred by them in foreign currency on account of Licence Fee, Documentation charges and Foreign Technician Fees. The appellant was also required to pay Service Tax on amounts received from the foreign company claimed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llectual property reads as under: - "Circular No. 80/10/2004-S.T., dated 17-9-2004 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi 1. The Finance (No. 2) Bill, 2004 has been enacted on 10-9-2004. With the enactment of the Finance Bill, 2. The scope of these changes is explained in the following paragraphs. 3. Education Cess on taxable services : ... 4. Business exhibition services : ... 5. Airport services : ... 6. Transport of goods by air : ... 7. Survey and exploration of minerals : ... 8. Opinion poll services : ... 9. Intellectual property services (other than copyrights) : 9.1 Intellectual property emerges from application of intellect, which may be in the form of an invention, design, product, process, technology, book, goodwill etc. In India, legislations are made in respect of certain Intellectual Property Rights (i.e. IPRs) such as patents, copyrights, trademarks and designs. The definition of taxable service includes only such IPRs (except copyright) that are prescribed under law for the time being in force. As the phrase 'law for the time being in force' implies such law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 Circular and that the C.B.E.C.'s clarifications issued post introduction of the levy have to be read in the context of and as explained in terms of the communications sent to the field formations by the TRU inter alia explaining the provisions of the Finance Bill / Finance Act. 9.1 We also note that the Ld. Commissioner has relied upon the stay order in the case of SICPA India Pvt. Ltd. v. Commissioner of Cus., C.Ex. & S.T., Siliguri [2013 (30) S.T.R.630 (Tri. - Kol.)] in support of his stance. However, we are of the view that it would be inappropriate to rely on the said order as it is merely an interim order and cannot be taken as laying down any enunciation in law and is bereft of any precedent value. 9.2 It may further be pointed out that this Tribunal in the case of SICPA India Pvt. Ltd. v. Commissioner of Cus., C.Ex. & S.T., Siliguri [2018 (15) G.S.T.L. 375 (Tri. - Kol.)] held that technical knowhow provided by a foreign company to an Indian company under a licence for manufacture of goods for consideration of Royalty equal to a percentage of net sale price of the goods, was nowhere registered / patented in India as an IPR service and therefore, the recipient of such ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repairs and maintenance was carried out within the jurisdiction of India and therefore was liable for tax under Section 65(105)(zzg) as "management, maintenance or repair" service and was liable for payment of duty in terms of Rule 3(1)(ii) of the Export of Services Rules, 2005. The Ld. Commissioner vide the impugned order has categorically held that the provision of service having took place in India, there is a breach of Rule 6A of the Service Tax Rules, 1994 and Rule 3(1)(ii) of the Export of Services Rules, 2005. To this extent, we are fairly in agreement with the findings of the Ld. Commissioner on the aspect. 11.2 We however note that the impugned Show Cause Notice for the period indicated supra was issued to the appellant on 19.04.2013, invoking the extended period of limitation, alleging suppression of facts unearthed during audit of the company's record. In view of the fact that the appellant is a public sector company completely under the control of the Ministry of Defence and owned by the Government of India, we find it rather unacceptable and quite improper to assume intent to evade payment of duty on the part of the organization. We therefore are not in agreement wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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