TaxTMI 
TaxTMI 
2005 (4) TMI 340
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....e of YBX model motorcycles in India. The recital mentions what the Indian company wanted to acquire :- "WHEREAS, Yamaha owns technical information relating to the manufacture and assembly of certain motorcycles parts and components thereof and certain trademarks and other intellectual property rights such as patents, design patents and utility models relating to motorcycles, parts and components thereof, all of which are part of the goodwill of Yamaha in the production and worldwide sale of motorcycles, parts and components thereof." The technical Information, Intellectual Property Rights, and Trade Mark sought to be transferred under the agreement find mention in paras 1.9, 1.10 and 1.11 of the agreement as under :- "1....
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....ads as under :- "2.1 Subject to the terms and conditions herein contained, Yamaha hereby grants to the Licensee on exclusive, non-transferable and indivisible license, without any right to sub-license to any person, to use Technical Information for the purpose of doing the following within the Territory during the term of this Agreement. (a) To manufacture or process locally Manufactured Parts at the Factory; (b) To have Locally Manufactured Parts manufactured or processed in the Territory by sub-contractors approved by Yamaha in accordance with Articles 3, 10.5, 12.4 and 13 hereof; (c) To procure Locally Procured Parts and to Import other Imported Parts approved by Yamaha in accordance with Articles 10 a....
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....order. 3. The finding of the Commissioner is that fee was paid for advise, Consultancy and Technical Assistance regarding manufacture of Yamaha Motorcycles. The Commissioner has also noted that since the agreement provided for Technical know-how, Technical Information, Personnel instructions and Training, the contract involved service of a Consulting Engineer. 4. We have perused records and heard learned Senior Counsel Shri Joseph Vellapally for the appellant and the learned SDR for the Revenue. 5. Learned Senior Counsel has taken us through the various provisions in the Technical Collaboration Agreement between the parties and has pointed out that the terms would clearly show that what is involved is a mere transfer of assets and ....
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....consideration for the relationship. The recital reproduced above brings out that the Japanese company owns technical information, trade marks and other intellectual property rights such as design, patent and utility models relating to motorcycle and parts and that the Indian company is desirous of acquiring such knowledge, patent, design, trade mark owned by that Japanese company. Clauses 9, 10 and 11 also clearly show that the Agreement was for licensing the transfer of intellectual property rights. Article 2 relating to grant of license makes it clear that what is being done is the grant of an exclusive non-transferable and indivisible license. The teaching service part covered by Article 5 speaks of personnel instructions and training ca....
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....glish Law, Fifty Edition, Volume 2 page 1595 as follows. "Royalty, a payment reserved by the grantor of a patent, lease of a mine or similar right, and payable proportionately to the use made of the right by the grantee. It is usually a payment of money, but may be a payment in kind, that is, of part of the produce of the exercise of the right. Royalty also means a payment which is made to an author or composer by a publisher in respect of each copy of his work which is sold, or to an inventor in respect of each article sold under the payment". In Navinon Ltd. v. CCE, Mumbai-VI - 2004 (172) E.L.T. 400 this Tribunal held that royalty payment does not attract Service tax as consulting engineer with the following observati....