Appellant not liable for service tax on trademark transfer. Extended limitation period unjustified. Appeal allowed.

The Tribunal held that the appellant was not required to pay service tax on the permanent transfer of trademark and brand to Fosters Australia as it constituted a permanent transfer, not subject to service tax. The extended period of limitation for issuing the show-cause notice was deemed unjustified due to the Department's prior awareness of the transaction. The Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief to the appellant.

---

---

Issues Involved:
1. Whether the appellant is required to pay service tax on a reverse charge basis for the payment made to Fosters Australia towards the permanent transfer of Fosters trademark and brand under the Deed of Assignment.
2. Whether the extended period of limitation can be invoked for issuing the show-cause notice.
3. Whether simultaneous penalties under Section 76 and 78 of the Finance Act, 1994 can be imposed.

Detailed Analysis:

1. Service Tax on Permanent Transfer of Trademark and Brand:
The core issue was whether the appellant is liable to pay service tax for the payment made to Fosters Australia for the permanent transfer of trademark and brand under the Deed of Assignment. The appellant argued that the transaction was a permanent transfer, not liable to service tax, as only temporary transfers of Intellectual Property Rights (IPR) were taxable post the Finance Act, 2005 amendment. The appellant cited various precedents, including Tata Consultancy Services Ltd. Vs. Commissioner of Service Tax, Mumbai, and ABB Ltd. Vs. Commissioner of C.Ex. & S.T., LTU, Bangalore, to support their claim that permanent transfers are not taxable.

The Tribunal examined the relevant provisions of the Finance Act, 1994, particularly Sections 65(55a), 65(55b), and 65(105)(zzr), which define 'Intellectual Property Right', 'Intellectual Property Service', and 'Taxable Service' respectively. It was noted that for a service to be taxable under IPR, it must involve the temporary transfer or permission to use an IPR, which was not the case here, as the Deed of Assignment indicated a permanent, exclusive, and irrevocable transfer.

The Tribunal found that the Commissioner had misinterpreted the Deed of Assignment, which clearly showed a permanent transfer of trademark and IPR. Supporting evidence included the Income Tax Assessment Order recognizing the purchase of the trademark and the registration of the trademark under the appellant's name. The Tribunal also referred to CBEC Circular F. No. B2/8/2004-TRU, which clarified that permanent transfers of IPR do not amount to rendering of service and thus are not taxable.

2. Extended Period of Limitation:
The appellant contended that the show-cause notice issued on 21/04/2011 was barred by limitation, as the Deed of Assignment was executed on 12/09/2006, and the Department had already audited the appellant and issued a separate show-cause notice for an overlapping period. The Tribunal agreed, noting that the Department was fully aware of the transaction, which was disclosed in the appellant's books of accounts and with the Income Tax authorities. Thus, there was no suppression of facts, and invoking the extended period of limitation was not justified.

3. Simultaneous Penalties under Section 76 and 78:
The appellant argued that simultaneous penalties under Sections 76 and 78 could not be imposed, citing the Punjab & Haryana High Court's decisions in Commr. of Central Excise Vs. Pannu Property Dealers, Ludhiana, and Commissioner of Central Excise Vs. First Flight Courier Ltd. The Tribunal, however, did not delve into this issue in detail, as it had already decided in favor of the appellant on the primary issues of service tax liability and limitation.

Conclusion:
The Tribunal concluded that the assignment of the trademark and IPR amounted to a permanent transfer, not subject to service tax. It also held that the entire demand was barred by limitation due to the Department's prior knowledge of the transaction. Consequently, the appeal was allowed, and the impugned order was set aside with consequential relief to the appellant.

---