TaxTMI 
TaxTMI 
2016 (4) TMI 598
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....from April 2004 to March 2009 with interest thereon and confirming penalties under section 76 and 78 of Finance Act,1994. 2. The appellant is said to have rendered 'scientific or technical consultancy service' chargeable to service tax under section 65(105) (za) of Finance Act, 1994 to M/s Doctors' Organics Chemicals Ltd and M/s Bravo Healthcare ltd. The tax liability that has been confirmed for rendering this service to the two recipients was held to be Rs. 112,80,000/- and Rs. 34,71,924/- respectively. 3. The appellant also has apparently rendered 'business auxiliary service' chargeable to tax under section 65(105)(zzb) of Finance Act, 1994 to M/s Doctors' Organic Chemicals ltd by providing material procurement a....
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....anic Chemicals Ltd was a consequence of conversion of the royalty amount unpaid into shares and hence, in accordance with section 67 of Finance Act, 1994, the value of the company taken over is taxable as gross receipts for rendering the service. 7. We observe that the original authority did not have the benefit of the decisions of this Tribunal supra cited on behalf of the appellant. In re Just Textiles Ltd., the bench held that 4. The appellant herein is a manufacturer of textiles and by no stretch of imagination, it can be perceived that the appellant is a science or technology institution or organisation.' 8. In re RM Dhariwal (HUF), the Tribunal examined the transactions of the transfer of brand name and formulae for manufactur....
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....ent also stands fortified by the view taken in Matrix Laboratories case wherein it was held that "scientific or technical consultancy" was not involved in the sale of entire technology for a consideration." 10. We notice that the decisions of the Tribunal cited supra have held that the tax liability will arise only when the consultancy is provided by a 'science or technology institution or organisation' and that transfer of technical knowhow is not the consultancy envisaged for taxation by section 65(105)(za) of Finance Act, 1994. 11. It is probably the description of the service in section 65 (105)(za) of Finance Act, 1994 that caused Revenue to initiate and adjudicate the tax demand. After all, there is no sphere of human activ....
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....irst to be hived off. 14. Scientific research and application of these to technical developments, by their very nature, are not compatible with the profit-driven industrial activity. Consequently, they are generally found to exist as independent entities bound more to academia than to enterprise. Nevertheless, industry does make use of their services in the form of consultancy. It is these are sought to be taxed as made clear form section 65(92) which designates the provider to be scientific or technical institution or organization. Consultancies occur at the interface of such institutions or organization with industry and this commercial facet is sought to be taxed. 15. Industry, on the other hand, being driven by profits is subject to t....