Tribunal remands case to original authority due to service tax on intellectual property services.

The tribunal remanded the matter to the original authority, considering a previous decision and the introduction of service tax on intellectual property services, without pronouncing the operative portion of the order again in open court.

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Issues:
Service tax on royalty received for technology transfer.

Analysis:
The appellant, engaged in manufacturing and selling heat sealing machines, transferred technology to another business for a consideration, entitling them to a 5% royalty on the sale price of each machine. The department demanded service tax on this royalty, claiming it as a service rendered by the appellant as a consulting engineer under the Finance Act, 1994. The adjudicating authority and the Commissioner (Appeals) upheld this demand.

The appellant's advocate argued that the appellant did not provide consulting engineering services, citing a previous order by the Deputy Commissioner holding that royalty received is not taxable. He requested a remand based on this decision. After careful consideration, the tribunal remanded the matter to the original authority, considering the findings in the previous case and noting that service tax on intellectual property services like royalty was introduced in the 2004 budget. The tribunal ordered accordingly, without pronouncing the operative portion of the order again in open court.

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