Transfer of technical know-how for manufacturing trailers not taxable as Consulting Engineer Services under Service Tax The Appellate Tribunal CESTAT Bangalore ruled that the transfer of technical know-how/technology for setting up a plant for manufacturing trailers does ...
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Transfer of technical know-how for manufacturing trailers not taxable as Consulting Engineer Services under Service Tax
The Appellate Tribunal CESTAT Bangalore ruled that the transfer of technical know-how/technology for setting up a plant for manufacturing trailers does not constitute 'Consulting Engineer Services' for Service Tax levy. Citing precedents, the Tribunal held that services transferred by a foreign company in such scenarios do not fall under the category of 'Consulting Engineer Services'. Consequently, the Tribunal allowed the stay application and appeal, setting aside the impugned order and granting any consequential relief.
Issues: Whether transfer of technical know-how/technology for setting up a plant for the manufacture of Trailers constitutes 'Consulting Engineer Services' for levy of Service Tax.
Summary: The Appellate Tribunal CESTAT Bangalore considered the case where the appellants entered into agreements with a German company for transfer of technical know-how/technology for setting up a plant for manufacturing trailers. The Revenue considered this transfer as 'Consulting Engineer Services' for Service Tax levy. The Tribunal referred to various rulings, including Navinon Ltd. v. CCE, Pfizer Ltd. v. CCE, and others, which held that services transferred by a foreign company do not fall under 'Consulting Engineer Services'. The learned Counsels argued that the issue is covered by these judgments in favor of the assessee, and therefore, the stay application and appeal should be allowed.
Upon hearing the learned JDR who tried to distinguish the citations, the Tribunal carefully considered the submissions. It was noted that the Commissioner should have applied the ratio of the judgments, which clearly stated that when a foreign concern transfers technical know-how/technology, it does not fall under Consulting Engineer Services. Consequently, the Tribunal accepted the prayer for allowing the stay application and appeal based on the cited judgments. The impugned order was set aside, and the stay application and appeal were allowed with any consequential relief.
The judgment was pronounced and dictated in open court by Dr. S.L. Peeran, Member (J).
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