TaxTMI 
TaxTMI 
2023 (6) TMI 1198
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....d has also set-aside the demand prior to 18.04.2006 but has confirmed the total demand of Rs. 5,33,80,931/- for both the periods which are shown as under:- SCN Period Demand proposed in SCN Demand confirmed in Order SCN dated 13.07.2010 2005-06 to 2009-10 3,12,68,932 2,53,99,399 SCN dated 13.04.2012 2010-11 to Sep'11 3,08,63,630 2,79,81,532 Since, both the appeals are arising from the same impugned order-inoriginal dated 31.08.2012, hence, both the appeals are taken up together for the purpose of discussion and decision. 2. Briefly the facts of the case are that the appellant-assessee M/s Schneider Electric India Pvt. Ltd. is engaged in the manufacture of electrical articles, namely, air circuit breaker, molded case circuit breaker, auto source changeover and integrated machinery process and factory control system and they are also registered with the service tax department. On the basis of the audit conducted by the officers of the Directorate General of Audit, two show cause notices were issued for non-payment of service tax under Section 66A of the Finance Act, 1994 on royalty amount paid to France based company (service provider) for transfer of technical ....
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....16-VIL-444 (CESTAT) vi. Asea Brown Bovery Ltd. v. CCE 2016-VIL-480 (CESTAT) vii. Chambal Fertilizers & Chemicals Ltd. v. CCE 2016-VIL-527 (CESTAT) viii. Tata Consultancy Services Ltd. v. CST 2016 (41) STR 121 (Tribunal) ix. Indian Farmers Fertilizer Co-op Ltd. v. CCE 2007 (5) STR 281 (Tribunal) 7. Ld. Counsel further submitted that the abatement / deduction is available under Notification No. 17/2004-ST dated 10.09.2004 which grants exemption from payment of service tax to the extent Research and Development ('R&D') cess is paid. She has also referred to the details of R&D Cess payment which are on page 55 of the appeal memorandum and the Challans evidencing payment of such R&D Cess which are shown at pages 200-208 of the appeal memorandum. 8. She further submitted that in the impugned order it has been held that deduction under Notification No. 17/2004-ST dated 10.09.2004 is available only to service tax paid under Section 66 and not as reverse charge under Section 66A. She further submitted that this finding is contrary to the decision of the Tribunal in the case of M/s Rochem Separation Systems (India) P. Ltd. v. CST 2015 (39) STR 112 (T) wherein it has been inter....
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....e revenue neutral as held in the following cases:- i. Munjal Showa Ltd. v. CCE 2017 (5) G.S.T.L. 145 (Tri. - Chan.) ii. Rochem Separation Systems (India) P. Ltd. v. CST 2015 (39) STR 112 (T) affirmed by Bombay High Court in 2019 366 ELT 103. iii. ABB Ltd. v. CCE 2019 (24) G.S.T.L. 55 (Tri. - Bang.) 10. She further submitted that information regarding non-payment of service tax was known to the Department as early as in November 2008 when the audit objection was raised on this count to the Appellant-Assessee whereas the first SCN was issued on July 2010. Hence, there was a delay in issuance of show cause notice and substantial demand is barred by time. Further, the department has not produced any material on record to show that there was suppression on the part of the appellant-assessee with intent to evade payment of service tax. For this submission, she relied on the following decisions:- (i) Anand Nishikawa Co. Ltd. v. CCE 2005 (188) ELT 149 (SC) (ii) Padmini Products v. CCE 1989 (43) ELT 195 (SC) 11. She also submits that the entire proceedings are revenue neutral as undoubtedly the appellant is entitled to credit of any such service tax payable under Section 66....
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....as been challenged by the department before the Hon'ble Apex Court and the appeals have been admitted by the Hon'ble Apex Court. 16. Ld. AR further submitted that in view of the decision of the Hon'ble Apex Court in the case of UOI vs. West Coast Paper Mills Ltd. - 2004 (164) ELT 375 (S.C.), the present case should be kept in abeyance till the matter is decided by the Hon'ble Apex Court. Ld. AR also stated that under similar circumstances, the Division Bench of this Tribunal in the case of B.E. Office Automation Products Pvt. Ltd. and in the case of M/s DLF Home Developers Ltd. adjourned the matter till the decision of the Hon'ble Apex Court. 17. Ld. AR further reiterated the findings in the impugned order and submitted that as per the agreement enter into between the parties, appellant-assessee is liable to pay service tax. 18. After carefully considered the rival submissions of both the parties and after perusal of the decisions relied upon by both the parties, we find that admittedly Intellectual Property Rights (IPR) such as potents, copyrights, trademarks and designs have not been registered in India under Indian Law. Hence a question arises whether the royalty paid by the ....
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....e find that the demand has been raised under the category of Intellectual Property Rights services under the Finance Act, 1994, by recording that the said technical know-how which has been given by the Foreign Company is their proprietary interest, and though it is not registered under Patents Act, 1970, the service tax liability arises on interpretation of definition of intellectual property services. 8. We find that the issue is no more res integra as the Tribunal in the case of Reliance Industries Ltd. (supra) (wherein one of us Shri M.V. Ravindran was a Member) in paragraph Nos. 2 to 12 was considering the very same issue and held that in order to fasten the service tax liability, the person providing the technical know-how has to be registered with the Patents Authority in India. If the IPR is registered in any foreign country but is not registered in India, the same will not attract the service tax, demand under reverse charge mechanism, is the ratio. We find that the said ratio is squarely applicable in these appeals post 18-4-2006. The same view has been expressed by the Tribunal in the case of Chambal Fertilizers and Chemicals Ltd. and Munjal Showa Ltd. (supra). Since t....
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.... Act, 1994. (vi) Reliance Industries Ltd. v. CCE 2016-VIL-444 (CESTAT) It was further clarified that IPR's like integrated circuits or undisclosed information, which was not recognised under Indian laws would not be covered under the said taxable services of IPR. We are in complete agreement with this clarification issued by the C.B.E. & C. and do not find any reason to disagree with the same. In view of the above, there can be no liability to tax under the head of IPR services in respect of an Intellectual Property Right that is not recognised by the law in India. 20. After taking into consideration, the ratios of various decisions cited (supra) and also the Circular dated 17.09.2004, we hold that the appellant assessee is not liable to pay service tax under IPR service, under Section 65 (105) (zzr) of the Finance Act, 1994. 21. Further, we find that the findings in the impugned order holding that deduction under Notification No. 17/2004-ST dated 10.09.2004 is available only to service tax paid under Section 66 and not as reverse charge under Section 66A is also contrary to the decision of the Tribunal in the case of Rochem Separation Systems (india) Pvt. Ltd. cited (supr....
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....wo of their judgments, Mahendra Engineering Works v. Collector -1992 (60) E.L.T. 194 (Mad.) and M.B. Ambaresan Factory v. Assistant Collector - 1992 (60) E.L.T. 195 (Mad.) categorically held that mere filing of appeals before the Supreme Court, without obtaining stay, is not sufficient ground for the department to retain the duty amount. If this is the view held by the Supreme Court and the Madras High Court, in relation to filing of the appeals in the very same proceedings, there could hardly be any justifiable ground to postpone the hearing of an appeal only because some identical issue is taken to the Supreme Court. On an identical prayer, the Special Bench 'C' of this Tribunal, has in Pidilite Industries Pvt. Ltd. v. Collector - 1990 (50) E.L.T. 577, held that appeal should not be kept in abeyance pending Supreme Court decision on a similar issue. In these circumstances, the prayer of the Ld. SDR, to keep the appeal pending, cannot be conceded to." Other decisions relied upon by the appellant-assessee on this issue are cited herein below:- (i) R. K. Texcon vs. Union of India-2005 (192) ELT 47 (Raj.) (ii) National Aluminium Company Ltd. vs. Commissioner of Customs (Preven....