2009 (1) TMI 22 - AT - Service Tax

Tribunal rejects Revenue's appeal on tax demand for 'Management Consultancy' services

The Tribunal rejected the Revenue's appeal against the Order-in-Appeal setting aside the tax demand for 'Management Consultancy' services. The ... Permitting the use of trade mark – royalty received - demand of tax under category of ‘Management Consultancy’ - there is no any material to support the view that the respondent provided any service of ‘Management Consultant’ - appeal filed by the Revenue is rejected Issues:Appeal against Order-in-Appeal setting aside adjudication order for tax demand under 'Management Consultancy' based on an agreement for the use of Trade Mark 'EYE' and name 'GNA' with royalty payments.Analysis:The appeal was filed by the Revenue against Order-in-Appeal No. 262/CE/JAL/ 2006 dated 25.8.2006 passed by the Commissioner (Appeals), setting aside the adjudication order. The respondent had entered into an agreement with M/s. GNA Udyog Limited for the use of Trade Mark 'EYE' and name 'GNA', receiving royalty payments. The adjudicating authority confirmed the tax demand under the category of 'Management Consultancy' for the period 1.4.2000 to 31.3.2005. However, the Commissioner (Appeals) overturned this decision.During the hearing, the Revenue, represented by the Departmental Representative, argued that by allowing the use of the trade mark, the respondent facilitated the creation of a marketing facility. On the other hand, the respondent, represented by an Advocate, supported the Commissioner (Appeals)' findings and highlighted the relevant terms of the agreement between the parties.Upon reviewing the agreement and considering the arguments from both sides, the Tribunal found that the respondent had permitted M/s. GNA Udyog Limited to use the name and trade mark as specified in the agreement. The agreement outlined the royalty payments for the use of the name 'GNA' and Trade Mark 'EYE' for different periods. The Tribunal observed that there was no evidence in the agreement to suggest that the respondent provided any service as a 'Management Consultant'.Consequently, the Tribunal concluded that there was no basis to support the claim of the Revenue regarding the provision of 'Management Consultancy' services by the respondent. Therefore, the appeal filed by the Revenue was rejected, upholding the decision of the Commissioner (Appeals). The judgment was pronounced in the Open Court, maintaining the rejection of the Revenue's appeal.