TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 839
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat such use of trade mark fell under the category of 'Management Consultant Service' liable to service tax during the relevant period. The adjudicating authority also held that the said service rendered did not amount to export of service because the amount of royalty received as shown in the balance sheet was shown in Indian currency and that the claim of the appellants that they did not receive any amount from M/s. Dabur Nepal (Pvt.) Ltd. (DNPL) is not correct because in their letter dated 28.08.2006 they confirmed the receipt as royalty from M/s. Redrock Ltd., U.K., M/s. DNPL, Nepal and M/s. ACCL, Bangladesh. 3. The appellants have contended that:- (i) They were not providing any management consultant service as they were only getting payments on account of royalty for allowing the use of their trade mark to the said three foreign companies as is evident from the agreements entered into by the appellants with each of them. (ii) Such services are specifically covered under Intellectual Property Service and not under Management Consultant service. They cited several judgements including the judgement of CESTAT in the case of Castrol Ltd. Vs. CCE, Raigad [2007 (8) STR 254 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bur will provide outside-India ongoing technical and R & D support, know-how information, operational improvements and skills in the areas of cost management, manufacturing, production procurement, sale marketing, and distribution of the products in the Territory and in such other areas as may be agreed upon between parties from time to time." The definition of 'Management Consultant' given in Section 65(65) of Finance Act, 1994 is reproduced below for convenience:- "65 (65) "management consultant" means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organisation in any manner and includes any person who renders any advice, consultancy or technical assistance, relating to conceptualising, devising, development, modification, rectification or upgradation of any working system of any organisation;" It is evident that as per agreement cited above, Dabur inter alia provided operational improvements and skills in the areas of cost management, manufacturing, production, procurement, sale, marketing and distribution of the product in the territory and in such other areas as may be agreed upon between the parti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n if it was held to be covered under "Management Consultant" service. Needless to say that allowing the use of trade mark does not fall within the scope of "Management or Business Consultant" service as has also been held in the case of CCE, Jalandhar Vs GNA Sons [2009 (14) STR 467 (Tri.- Del.)] and the said service is clearly covered under Intellectual Property service. 7. It is seen from the agreement entered into between the appellants and M/s. ACCL that the service provided by the appellants was not merely to allow the use of their trade mark. In para 9 of the said agreement relating to respective duties of the licensor and the licensee, the appellants agreed as under:- "9.1 Subject to and upon the terms and conditions set forth in this Agreement, Licensor agrees to make available to Licencee the Know-how and technical support for the purpose of production of the Products at the facilities of Licensee. 9.2 Licensor shall advise and make available to Licensee the Know-how in relation to: 9.2.1 production information, formulations, ingredients, functions and usage factors; 9.2.2 specification for the Products, including data, techniques and procedure for quality control, pac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....08.2006. As regards the adjudicating authority's contentions that they neither claimed the benefit of exemption for export of service nor submitted figures relating to the impugned services in their ST-3 Returns before the Show Cause Notice, it is to state that the appellants contention was that they were not providing any taxable service as their service did not fall under 'Management Consultant' service and therefore the question of claiming the exemption for export of service simply did not arise. The appellants are well within their right to claim the exemption on account of export of service if their service was held taxable under 'Management Consultant' service. 9. The appellants have cited several judgements to claim that service rendered by them did not fall in the category of 'Management Consultant' service. But those case laws do not cover the entire gamut of impugned services rendered by the appellants. In the case of CIT Vs. Vacmat Corporation Pvt. Ltd. [1978 (115) ITR 554 (Guj)], the issue related to only know-how. In the case of Yamaha Ltd. Vs. CCE [2005 (186) ELT 161 (Tri. Del)] cited by the appellants, the issue involved was acquisition of technology an....