TaxTMI 
TaxTMI 
2008 (7) TMI 60
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....f technical know-how or patent and other connected services. They agreed to pay royalty of 5 per cent of the value addition of each product made and sold by OEN using know-how or patent of Scharack licensed under the agreement. The authorities took the view that technical know-how is an intangible property covered under the ambit of the definition of Intellectual Property Right in Clause (55a) of section 65 of the Finance Act and therefore, the provision of technical know-how is a taxable service under the category of "Intellectual Property Service' with effect from 10-9-2004, which includes transferring, whether permanently or otherwise any intellectual property right. In view of this understanding, the royalty paid by the assessee on various days were brought within the purview of Service Tax. The contention raised by the assessee that the provisions of Finance Act is not applicable for royalty by them to foreign consultant, was not accepted. The plea of time bar was also not accepted. The appellant also pointed out that Section 66A making the recipient liable to pay Service Tax when the service provider is outside India came into effect only from 18-4-2006 and hence, the demand ....
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....ho does not have any office in India, and if such a person is liable to pay service tax, the said tax shall be paid by such person or on his behalf by any other person authorized by him. In the present case, from the agreement of transfer of technology and know-how, it is apparent and if its services covered then the appellants herein are the recipient of such services, which are provided by Ciba Geigy Ltd., Switzerland or their authorized representatives in India. They were required to discharge that obligation and liability. The appellants cannot be fast and with the said tax liability since they are being authorized representative of Ciba Geigy Ltd., Switzerland, is not forthcoming from the records. Therefore, the Commissioner (Appeals) upholding the order dated 27-8-2003 asking the appellants to discharge the tax liability and imposing penalty on them needs to be set aside. 4. Since Ciba Geigy Ltd., Switzerland, are also manufacturers of the same goods, the definition of consulting engineer and providing the services as per sub-section of section 65 of the Act cannot be upheld. 5. The amounts, which the appellants have to remit to Ciba Geigy Ltd., Switzer land, are mentio....
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....ion 76. 11. In view of the findings, the order is required to be set aside and appeal allowed." (p. 414) 5.1 Likewise the Tribunal m the case of Bajaj Auto Ltd. (supra) after examining the articles of agreement in a similar situation also allowed the appeal by following the ruling rendered by them in earlier order Aviat Chemicals (P) Ltd. v. CCE 2004 (170) ELT 466/ [2007] 6 STT 510 (Delhi-CESTAT). The findings recorded in Paras 4 - 9 as reproduced herein below: "4. The submission of BAL is that these articles provide for deduction of income-tax at source and remitted the balance to KHT in view of the fact that the requirement to issue a certificate for deduction of tax at source, is applicable under the Income-tax Act, 1961 and there is no provision for payment of service tax, as no such procedure for issuing certificate existed under the Finance Act, 1994 or the Service Tax Rules. The learned counsel supports this argument with reference to the provisions of sections 195 and 199 read with section 203 of the Income-tax Act, 1961 which provide for deduction of Income-tax by any person responsible for paying to a non-resident or to a foreign company, any interest or an....
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.... address; (b) name and address of the client to whom the taxable services were rendered; (c) nature of taxable services rendered; (d) period for which taxable services were rendered: (e) value of the taxable services rendered; (f) service tax liability on the taxable services rendered, along with a copy of the bill raised on the client to whom services have been rendered, a copy of the contract or agreement regarding the provision of such services to the client, and a demand draft payable to the Commissioner of Central Excise towards his service tax liability'. The proviso clearly envisages existence of 3 persons,— (1) service provider; (2) service receiver; (3) representative/client of service provider. 7. In the present case BAL is the Service Receiver. In other words, BAL is the client of KHI, Japan who is the Service Provider. The contention of the BAL that they cannot be both client and agent simultaneously, is, therefore, well founded. The proviso is obviously only to ensure that the service provider outside India not having any office in India, does not escape liability to pay if he has a representative in India/agent in India and to ensure....