2018 (2) TMI 1409

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....hey have entered into an agreement on 11/08/1975 with M/s Hamdard (Waqf) Laboratories (HWL), Delhi for use of such trade mark in respect of products as marketed by HWL. This agreement was continuing and is subsisting. The appellant is receiving periodical payments as a consideration for use of the said trade mark in terms of the agreement which was renewed periodically. The dispute in the present appeal relates to service tax liability of the appellant for the period 01/06/2006 to 31/03/2011 with reference to such consideration received for transferring the said trade mark rights. Proceedings initiated against the appellant resulted in the confirmation of service tax demand of Rs. 4,61,05,367/- alongwith penalties under Section 77 and 78 of....

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....the continuous receipt of consideration for such brand name is rightly liable to be taxed as transfer of IPR service. 4. We have heard both the sides and perused the appeal record. We note that the appellant, the owner of registered trade mark "Hamdard", transferred temporarily the right to use such brand name to HWL. The agreement was periodically renewed and is subsisting. The payment of consideration to use brand name was periodical and was amended from time to time. We have perused the impugned order which upheld the tax liability. The Original Authority confirmed the liability mainly on the basis that the impugned agreement indicates that the appellant's transfer of right is not on a permanent basis for a life time and in such a case ....

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....vice means transfer temporarily or permitting the use or enjoyment of any IPR. Admittedly, such transfer happened before the introduction of the tax entry in the present case. The tax entry is not for continuous usage of Intellectual Property but on the event of transfer or permission. Examining the said tax entry, the Tribunal in Denso Haryana Pvt. Ltd. (supra) observed as below :- "5. Having heard both the sides and examined the terms of the agreement and other facts of the case, we find that the point for decision is whether or not IPR service was received even after 10-9-2004 by M/s. DHPL in terms of agreement entered into in 2002. We find similar issue came up before this Tribunal for decision. In the case of Modi Mundipharma Pvt. Ltd....