TaxTMI 
TaxTMI 
2019 (1) TMI 1037
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the facts of the present case are that the appellants are engaged in the manufacture of various electrical goods such as control and relay panel, capacitors, relays, drives, DCS systems, Air circuit breakers, contractors, motors etc. and also providing services viz erection, installation, commissioning of said equipment and machinery and are also registered with Service Tax Department under 'consulting engineer, erection, installation and commissioning, maintenance and repair, Goods Transport Agency, testing and analysis and Business Auxiliary Services'. The appellant, in order to manufacture the above mentioned electrical equipments and accessories and to provide such services, receive various services from their overseas group companies M/s. ABB Stoz-Kontakt GmbH, M/s. ABB Sace S.p.A, M/s. ABB Uumet, M/s. ABB Technologies Ltd., M/s. ABB OY Drives (the Foreign Companies, for short). After rendering such services, the foreign companies raise invoice/bill on the appellants towards the professional services and the appellant make the payments against such bills in foreign currency. Appellant received the above services for the period January 2007 to December 2007 and paid an amount....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he longer period of limitation proposing to demand the service tax of Rs. 8,72,19,069/- under Section 73(1) of the Act along with interest and also proposed penalties. The appellant contested the show-cause notice by filing detailed reply rebutting all the allegations in the show cause notice and after following the due process, the Commissioner rejected all the submissions of the appellant and passed the impugned order confirming the demand. 4. Heard both the parties and perused records. 5.1. Learned counsel for the appellant submitted that appellants have remitted the entire service tax along with interest prior to the issue of show-cause notice but the appellants are contesting the liability of service tax on the following: - i. Demand of service under the category of Intellectual Property Right service on transfer of technical know-how. ii. Demand of service tax on the activity of technical testing and analysis rendered outside India. iii. Demand of service tax on commercial training or coaching service rendered outside India. 5.2. Learned counsel in their written submissions have also stated that the appellants are not contesting the demand of service tax of Rs. 2,27,53,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AT-MUM-ST] iv. Munjal showa Ltd. Vs. CCE&ST, Delhi (Gurgaon) [2017(5) GSTL 145 (Tri. Chan.)] v. Catapro Technologies Vs. CCE, Nashik [2017-VIL-534-CESTAT-MUM-ST] vi. Catapro Technologies Vs. CCE, Nashik [2017 (48) str 94 (Tri. Mum.)] vii. Bharat Oman Refineries Ltd. CCE&S& Bhopal [2017(4) GSTL 221 (Tri. Del.)] viii. Reliance Industries Ltd. Vs. CCE&ST, LTU, Mumbai [2016(44) STR 82 (Tri. Mum.)] ix. Rochem Seperation Systems (India) Pvt. Ltd. Vs. CST, Mumbai [2015(39) STR 112 (Tri. Mum.)] x. Tata Consultancy Services Ltd. Vs. CST, Mumbai [2015-TIOL-2370-CESTAT-MUM] xi. Thermax Ltd. Vs. CCE, Pune [2014(36) STR 318 (Tri. Mum.)] 5.4. He also placed reliance on the decision of the CESTAT in their own case vide Final Order No.20183/2016 dt. 02/02/2016 wherein the issue related to demand of service tax on the technical know-how received by the appellants even for the period after 18/04/2006 and the CESTAT allowed the appeal of the appellant for the period prior to 18/04/2006 by relying on the decision in the case of Indian National Ship Owners Association Vs. UOI [2009(13) STR 235 (Bom.)] and the matter was remanded to the adjudicating authority for passing an order with respect t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....STL 72 (Tri. Mum.)] ii. Jet Airways (I) Ltd. Vs. CST(Mumbai) [2016(44) STR 465 (Tri. Mum.)] iii. Reliance Industries Ltd. Vs. CCE&ST, LTU, Mumbai [2016(44) STR 82 (Tri. Mum.)] iv. Surya Pharmaceuticals Ltd. Vs. CCE, Chandigarh-II [2016(43) STR 479 (Tri. Chan.)] v. CCE, Jamshedpur Vs. Jamshedpur Beverages [2007(214) ELT 321 (SC)] vi. Amco Batteries Vs. CCE [2003(153) ELT 7 (SC)] 5.6. Learned counsel also submitted that the demand for the period January 2007 to March 2007 is clearly time barred. As far as interest and penalty are concerned, the learned counsel submitted that in the facts and circumstances, the penalty imposable is not sustainable. 6. On the other hand the learned AR defended the impugned order. 7.1. After considering the submissions of both the parties and perusal of the material on record, we find that the appellants have paid the royalty / license fee to M/s. ABB Technology Ltd., Zurich, Switzerland towards the receipt of technical know-how and as per the licence agreement, the foreign companies are making available to the appellant knowledge by means of data, experience, for the purpose of manufacture, sale and use of the contract product and the providing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he said intellectual property right. In other words the provider of service has to be the holder of related intellectual property right. It is pertinent to note that the Department has issued a clarification vide F.No. B2/8/2004-TRU dt. 10/09/2004 to clarify the scope of service which is reproduced herein below:- 9. Intellectual property services (other than copyrights): 9.l. Intellectual property emerges from application of intellect, which may be in the form of an invention, design, product, process, technology, book, goodwill etc. In India, legislations are made in respect of certain Intellectual Property Rights (i.e. IPRs) such as patents, copyrights, trademarks and designs. The definition of taxable service includes only such IPRs (except copyright) that are prescribed under law for the time being in force. As the phrase 'law for the time being in force' implies such laws as are applicable in India, IPRs covered under Indian law in force at present alone are chargeable to service tax and IPRs like integrated circuits or undisclosed information (not covered by Indian law) would not be covered under taxable services. 9.2. A permanent transfer of intellectual prope....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the appellant for the period prior to 18/04/2006 by relying on the decision in the case of Indian National Ship Owners Association cited supra and remand the matter to the adjudicating authority for passing an order with respect to the demand for the period after 18/04/2006 on the issue of taxability of technical know-how under Intellectual Property Rights service and the Commissioner of Central Tax, Bangalore vide de novo Order-in-Original No.3/2017-18 dt. 29/12/2017, dropped the demand on the technical know-how services even for the period after 18/04/2006 as the same does not fall under the service vidz. Intellectual Property Right service. Further we find that in various decisions relied upon by the appellant cited supra, this issue is no more res integra and has been settled by various decisions of the Tribunal that there cannot be any service tax on technical know-how. Therefore this issue is decided in favour of the appellant and the demand of service tax to the tune of Rs. 6,28,85,949/- is set aside. Further as far as technical testing and analysis services are concerned, though the appellant had challenged the same but during the course of argument, the learned counsel f....