Revenue's Appeal Dismissed: Know-How Transfer Not Taxable

The Revenue's appeal against the transfer of technical know-how by the assessee to their joint venture firm, contending it should attract service tax under Consulting Engineers category, was dismissed. The Commissioner and Tribunal held that such transfer does not fall under Consulting Engineering services, citing precedents including Yamaha Motors (I) Pvt Ltd. v. CCE Delhi. The Tribunal reiterated that the know-how transfer does not qualify as Consulting Engineering services, in line with previous judgments, leading to the dismissal of the appeal.

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Issues Involved: Interpretation of service tax provisions on transfer of technical know-how.

Summary:
The Revenue appealed against OIA No. 342/2003, contending that the transfer of technical know-how by the assessee to their joint venture firm does not amount to advice consultancy or technical assistance under the Finance Act, 1994, and thus should attract service tax under the category of Consulting Engineers. However, the Commissioner and the Tribunal held that the activity of selling or transferring technical know-how does not fall under Consulting Engineering services.

Upon review, it was found that the Tribunal had previously approved the Commissioner's view in various cases, including Yamaha Motors (I) Pvt Ltd. v. CCE Delhi, Turbo Energy Ltd. v. CCE Chennai, CCE v. Veleo Friction Material India (Pvt.) Ltd., Navinon Ltd. v. CCE Mumbai, and Aviat Chemicals Pvt. Ltd. v. CCE Mumbai. The Tribunal reiterated that the appellants did not provide any service within the category of Consulting Engineers but simply transferred their know-how, which does not qualify as Consulting Engineering services. Consequently, the appeal was dismissed in line with the precedent set by the cited judgments.

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