2023 (10) TMI 170

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....reement Scigen could use the technology to manufacture the products at any place in the world including its existing Pune (India) facility. During audit an objection was raised that since the said technology is used in Pune it does not become 'Export of Service'. The appellant had paid service tax of Rs. 74,99,857/- and interest of Rs. 51,34,290/-. The appellant claimed the refund of the said service tax and interest. The said refund claim was rejected on the ground that the said transfer of technology did not amount to 'Export of Service' as the said service though sold to M/s Scigen, Singapore was used in the plant located at Pune (India) also. Learned counsel pointed out that they had transferred the agreed upon technology in soft copy to the registered office of M/s Scigen, Singapore and the agreement authorized M/s Scigen, Singapore to use the said technology anywhere including in India. 3. During the audit of the appellant premises in the month of September 2012, an objection was raised that the service provided by the appellant to M/s Scigen, Singapore was not 'Export of Service'. The audit was of the view that the said service is chargeable to service tax under the head ....

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....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." He argued that the term 'under any law for the time being in force' appearing in Section 65(55a) implies that the Intellectual Property Right should be protected under any Indian law in force and only then it become taxable service. He pointed out that the transfer of technical know-how is not protected or recognized by 'Indian law' and therefore does not qualify to be an Intellectual Property Right. He argues that from the definition of IPR, it should be in the nature of a specific right like Patent or Trademark or Design under the P....

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...., such rights should be registered with Trademark/Patent authorities. It is a fact on record that such trade mark is not registered in India. Moreover, the C.B.E. & C. Circular dated 17-9-2004 relied upon by the ld. AR is having no help to the Revenue as it has been clarified that the taxable service include only such Intellectual Property Rights except Copyright that are prescribed under the law for the time being in force, as the term 'time being in force' implies that, as are applicable in India, and Intellectual Propertyrights covered under Indian law in force alone are chargeable to service tax and Intellectual Property Rights like Integrated Circuits or Undisclosed Information would not cover under the taxable services. Admittedly, Trade Mark rights which have been used by the appellant-assessee are not registered in India, therefore, the same are not liable to tax under IPR service, in the light of the decision in the case of Chambal Fertilizers & Chemicals Limited (supra), wherein this Tribunal has observed as under :- "5. We have heard both sides and examined the appeal records. The only point for decision is that whether or not the appellant received taxable serv....

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....bility on reverse charge basis." Therefore, we hold that services received by the appellant-assessee are not covered under Intellectual Property Rights services, under Section 65(105)(zzr) of the Finance Act, 1994, therefore, no service tax is payable by the appellant-assessee. 8. In that circumstance, we hold that services received by the appellant-assessee are not covered under IPR service, under Section 65(105)(zzr) of the Finance Act, 1994. Therefore, no service tax is payable by the appellant-assessee. 9. In these circumstances, we hold that extended period of limitation is not invocable and the demand is not sustainable. We also take note of the fact that the agreement is dated 11-3-2002 whereas the levy of tax under IPR service has come into force on 10-9-2004. As the agreement is executed on 11-3-2002, prior to introduction of IPR Service, the demand of service tax is not sustainable in the light of the decision of this Tribunal in the case of Reliance Industries Limited - 2016-TIOL-1654-CESTAT-MUMBAI = 2016 (44) S.T.R. 82 (Tri.-Mum.), wherein this Tribunal observed as under :- "Insofar as the agreement with Investa Technologies S.A.R.L. ....