TaxTMI 
TaxTMI 
2019 (11) TMI 1344
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....de Order No.13/2010 dated 9.2.2009. Department also opined that the appellants have obtained technical knowhow from Foreign Service providers and were not paying applicable duty on technical knowhow and intellectual property service. Therefore, a show-cause notice dated 22.10.2007 was issued to the appellants and was confirmed by Order No.14/2009 dated 9.2.2009. The appellants have filed appeal Nos.ST/456/2009 and ST/500/2009 against the above orders. Revenue has also filed appeal No.ST/442-443/2009 against the impugned order on the plea that penalty under Section 78 was not imposed though penalty under Section 76 was imposed against the appellants. ST/456/2009 & ST/CROSS/134/2009-DB filed by the assessee and ST/442/2009-DB filed by the department 2. Coming to the appeal No.ST/456/2009, the appellant submits that the appellants have deposited service tax of Rs. 37,50,695/- for the period 16.8.2002 to 31.3.2006 (out of Rs. 80,65,503/-) and service tax of Rs. 48,76,268/- was deposited for the period 1.4.2006 to 31.3.2007 (out of Rs. 65,94,694/-). He submits that in view of the judgment of the Hon'ble Bombay High Court in the case of Indian National Shipowners Association vs. UO....
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....s that Department has demanded on the technical knowhow received from their related foreign entity for the period 16th August 2002 to 31st March 2007; however, the demand on the same was under the heading "Consulting Engineering Services" for the period 16.8.2002 to 9.9.2004 for an amount of Rs. 92,74,747/- and under "Intellectual Property Services" for the period 10.9.2004 to 31.3.2007 for an amount of Rs. 3,34,03,591/-. Learned counsel submits that in view of Indian National Shipowners Association case (supra), the demand under Consulting Engineering Services cannot be sustained for the impugned period i.e., 16.8.2002 to 9.9.2004. Coming to the demand in respect of Intellectual Property Services for the period 10.9.2004 to 31.3.2007, he submits that this Bench in the case of ABB Ltd. vide Final Order No.21963/2018 (2019 (1) TMI 1037-CESTAT-Bangalore) held that Technical Knowhow is not recognised as Intellectual Property under Indian Laws and therefore such knowhow received by the appellants is not within the purview of "Intellectual Property Services". 7. The learned AR for the Department has reiterated the findings of Orders-in-Original and submitted that as observed by the C....
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....staff is subject to the confidence clauses under paragraph 7.2. 5.4 Purchase price and payment terms for the transfer of knowhow, technical assistance & training & technical services are specified in Exhibit 4. 6-9.......... 10. TRADE MARKS, LOGO, ETC. 10.1 LM hereby grants to LM India the right to use each and everyone of the trademarks and trade names upon or in connection with the LM 34.0P rotor blades manufactured by LM India. The rights of LM India to use the trade marks & trade names as aforesaid is an exclusive right for the whole of India provided that the blades manufactured are in conformity with the ISO 9001: 2000 specifications. 10.2 Nevertheless, LM India is not entitled to sell the right to use the aforesaid trademarks or trade names to a third party. 10.3 In case of bankruptcy etc., of LM India the right to use the aforesaid trademarks and trade names repeals." 9.1 On going through the above, it is clear that the payments are made for technical knowhow, training, etc., and not for the use of logo. Though, the use of logo is permitted in terms of the agreement unless a specific payment is made for the same, it c....
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....axable Service of Intellectual Property Right ', we find that for any services to be covered under the taxable service concerning intellectual property right, the following ingredients need to be present : (i) the said service need to have the element of the 'intellectual property right' and covered as such by the definition of 'intellectual property right' given in the Section 65(55a) of the Finance Act, 1994. (ii) There has to be temporary transfer of any intellectual property right OR there has to be the permission to use or enjoy any intellectual property right. (iii) The said transfer or permission for use or enjoyment of intellectual property right has to be by the holder of the 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, dated 10-9-2004 to clarify the scope of service which is reproduced herein below :- 9. Intellectual property services (other than copyrights) : 9.1 Intellectual property emerges from application of intellect, which ....
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....time being in force. In fact know-how is the undisclosed information cited by the Department clarification dated 10-9-2004 as example of intellectual property right not covered by any Indian law. The transaction in the present case was for know-how which is in the nature of property, no service was provided by the foreign companies. This issue has been considered by the Tribunal in the appellant's own case which is reported in 2017 (49) S.T.R. 209 and it was held by the Division Bench that the right to know-how does not fall in the definition of Intellectual Property Right as given in Section 65(55a) of the Finance Act and Service Tax is not leviable on the same under the Finance Act. Further we find that the Division Bench in another case of the appellant vide Final Order No. 20183/2016, dated 2-2-2016 allowed the appeal of the appellant for the period prior to 18-4-2006 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 18-4-2006 on the issue of taxability of technical know-how under Intellectual Property Rights servic....