Copyrighted logo licensing falls outside intellectual property service tax when the asset is an artistic work, not a trademark.

Royalty for permitting use of a logo registered as a copyrighted artistic work is not taxable as intellectual property service under the Finance Act, 1994, because the statutory definition of intellectual property right expressly excludes copyright. The logo retained its character as a copyright under the Copyright Act, and its licensing did not convert it into a trademark merely because it was used in a commercial arrangement. On that basis, the Tribunal treated the permitted use of the copyrighted work as outside the taxable category of intellectual property service, so service tax could not be demanded on the royalty.

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Issues: Whether royalty received for permitting use of a logo registered as an artistic work under the Copyright Act is taxable as intellectual property service under the Finance Act, 1994.

Analysis: The definition of intellectual property right under Section 65(55a) of the Finance Act, 1994 expressly excludes copyright, while intellectual property service under Section 65(55b) covers transfer or permitted use of intellectual property rights. The logo in question was registered as a copyright and certified as an artistic work, and the goods marketed by the licensees already carried separate trademarks. On the evidence, the logo functioned as a copyrighted artistic work and not as a trademark. The registration under the Copyright Act could not be ignored, and the character of the mark as used in the licensing arrangement did not convert it into a trademark for the purpose of service tax. The Tribunal also followed the view that such copyrighted artistic properties fall outside the taxable category of intellectual property service.

Conclusion: Royalty for use of the logo was not liable to service tax under intellectual property service, and the demand could not be sustained.

Ratio Decidendi: Where the licensed property is a copyright in an artistic work, and not an intellectual property right within the meaning of the Finance Act, 1994, its permitted use does not attract service tax under intellectual property service.

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