TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Royalty on copyrighted TTK logo not taxable as Intellectual Property Right service under Section 65(55a); appeal allowed</h1> The Tribunal held that royalty received by the appellant for permitting use of the 'TTK' logo by group entities was not taxable under the category of ... Classification of service - Intellectual Property Right service or not - royalty income received for permitting the group companies to use the logo ‘TTK’ as trademark - HELD THAT:- The issue is no more res integra and as rightly submitted by the appellant in M/S. T.T. KRISHNAMACHARI & CO. VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI II [2025 (3) TMI 1060 - CESTAT CHENNAI] stands covered in their favor - it was held in the said case that 'Intellectual property right' under Section 65(55a) excludes copyrights, and the 'ttk' logo's registration under the Copyright Act exempts it from service tax under IPR services. The Revenue has not produced any evidence otherwise. Therefore, respectfully following the same, the impugned Orders-in-Original are liable to be set aside. Appeal allowed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether consideration (royalty) received for permitting group companies to use the 'TTK' logo, registered as an artistic work under the Copyright Act, 1957, is chargeable to service tax under 'Intellectual Property Right' service for the periods April 2013-March 2014 and April 2014-March 2015. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Taxability of royalty for use of 'TTK' logo under Intellectual Property Right (IPR) service Legal framework (as discussed) 2.1 The Tribunal referred to Notification No. 25/2012-ST dated 20.06.2012 as amended by Notification No. 03/2013-ST dated 01.03.2013, Entry 15, exempting services provided by way of temporary transfer or permitting the use or enjoyment of a copyright relating to original literary, dramatic, musical or artistic works, and cinematograph films for exhibition in cinema halls/theatres. 2.2 The Tribunal relied on the earlier final orders in the same assessee's case, wherein it had examined the definitions under Section 65(55a), 65(55b), 65(105)(zzr) of the Finance Act, 1994 (defining 'intellectual property right', 'intellectual property service' and taxable service thereunder), the definition of 'trade mark' and 'mark' under the Trade Marks Act, 1999, and 'copyright' and 'artistic work' under Sections 14 and 2(c) of the Copyright Act, 1957. Interpretation and reasoning 2.3 The Court noted that the 'TTK' logo is registered under the Copyright Act, 1957 as an 'artistic work' and that the exemption at Entry 15 of Notification No. 25/2012-ST (as amended) squarely covers services by way of temporary transfer or permitting the use or enjoyment of such copyright. 2.4 The Court followed its coordinate Bench's findings in the assessee's own earlier cases, which held that: (a) the definition of 'intellectual property right' under Section 65(55a) specifically excludes copyright; (b) the 'TTK' logo functions as a 'house mark', identifying the manufacturer/distributor, and does not operate as a product 'brand name' or trade mark for the individual goods, which have their own separate registered trade marks; (c) any infringement of rights in the logo lies under the Copyright Act and not under the Trade Marks Act. 2.5 The earlier decisions, as extracted and relied upon, reasoned that registration of the logo as an artistic work under the Copyright Act is conclusive for classifying the right as copyright, and the Tribunal cannot disregard the certificate of registration by questioning the artistic value of the logo. The Court also reiterated that, in similar factual circumstances, cartoon characters treated as trade marks in contractual documents were nevertheless held to be 'artistic works' under the Copyright Act and therefore excluded from 'intellectual property right' for service tax purposes. 2.6 The Court observed that the issue is no longer res integra, as the previous final orders in the assessee's own case for earlier periods (both pre-negative list and subsequent) had already set aside similar demands on royalty received for use of the 'TTK' logo, and those decisions have attained finality with no contrary evidence from Revenue. Conclusions 2.7 The royalty received for permitting group concerns to use the 'TTK' logo, registered as an artistic work under the Copyright Act, constitutes consideration for temporary transfer or permitting use of copyright in an artistic work and is covered by the specific exemption under Entry 15 of Notification No. 25/2012-ST as amended. 2.8 As copyright is expressly excluded from the scope of 'intellectual property right' under Section 65(55a) of the Finance Act, 1994, the service cannot be taxed as 'Intellectual Property Right' service. 2.9 Following binding coordinate Bench decisions in the assessee's own earlier cases, the demands of service tax, interest, and penalties confirmed in the impugned Orders-in-Original for the disputed periods are unsustainable and liable to be set aside. 2.10 The appeals are allowed with consequential relief, if any, in accordance with law.
TaxTMI 
TaxTMI 
