Unregistered trademark protection under trade mark law can still support service tax exposure and limit full pre-deposit waiver.

An unregistered trademark may still enjoy legal protection under the Trade Marks Act, 1999, including rights against passing off, so its unregistered status in India does not by itself exclude service tax exposure on intellectual property-related licence fees. Relying on Sections 11(3) and 27(2), the Tribunal treated the appellant's challenge as not strong enough for complete waiver of pre-deposit in the service tax dispute. Complete waiver was refused, and the appellant was directed to pre-deposit 50% of the tax demanded, with the balance pre-deposit and recovery stayed pending disposal of the appeal.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit in a service tax dispute arising from licence fees paid for use of an unregistered trademark.

Analysis: The dispute turned on whether an unregistered trademark could still be regarded as a right protected under law for the purpose of the service tax levy on intellectual property-related services. The Tribunal noted that the Trade Marks Act, 1999 recognizes both registered and unregistered trademarks and preserves rights against passing off even where the mark is unregistered. It relied on the statutory scheme under Section 11(3) and Section 27(2) to hold that an unregistered trademark is not outside legal protection in India. On that prima facie view, the appellant's contention that no tax liability could arise merely because the mark was not registered in India was not accepted for the purpose of granting full waiver.

Conclusion: Complete waiver of pre-deposit was refused, and the appellant was directed to pre-deposit 50% of the tax demanded; balance pre-deposit and recovery were waived/stayed pending disposal of the appeal.

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