2017 (4) TMI 1129

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....nical information and also various engineering services, in connection with setting up of their manufacturing plant. The Revenue entertained a view that the appellants received taxable service under the category of consulting engineering service in terms of Section 65 (31) of the Finance Act, 1994. Accordingly, proceedings were initiated against the appellant which resulted in the impugned order. The Original Authority confirmed service tax liability of Rs. 4,66,84,940/-. He also imposed penalty of equivalent amount under Section 78 of the Act. 2. The learned Counsel appearing for the appellant mainly submitted on the following grounds :- (i) the grant of license to use technical knowhow or technical information by the foreign companies c....

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.... agreement. The agreement is not for any consultancy, advise or assistance; (iii) the demand is also contested on the question of time bar. It is submitted that the appellants are fully eligible for credit of whatever service tax payable on such services as demanded by the Revenue. In such situation, there could be no sustainable allegation of suppression of fact, malafide intend etc. The whole payment is available as a credit and for the appellant as well as for Government it is a revenue neutral situation. As such, a demand for extended period as well as penalties on the appellant will not survive. 3. The learned AR reiterated the findings in the original order. He further submitted that each one of the contract has provision for prov....

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.... (licensor) warrants that it has the right to grant appellant a license under licensor's patent rights described therein. The licensor granted to the appellant (licensee) a non-exclusive, non-transferable license under licensor's patent rights to use the process in the unit, to use any apparatus or catalyst therefor etc. The licensor provides technical information in terms of the said agreement. The said agreement also mentions about separate engineering agreement for providing engineering designs specifications for the appellant. Payment is as royalties. The royalty payments is as per the schedule agreed upon. 6. Agreement dated 31/03/1997 is between appellant and Chevron Research and Technology Company, U.S.A. The said agreement states t....

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....nts are for supply of technical knowhow, process technology, proprietary technical information and various connected services to the appellant in connection with setting up of their plant in Madhya Pradesh. The Original Authority mainly focused on the engineering services, which are a follow up of the transfer of technical knowhow, to conclude that the appellants received engineering consultancy service only. We are not in agreement with such conclusion. The very fact that all these agreements talk about the foreign companies as "licensor" itself is revealing. In a typical agreement for consultancy service, there will be no licensor or licensee with transfer of licensed process technology or proprietary technical information. The essence of....