TaxTMI 
TaxTMI 
2025 (3) TMI 1060
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvice and Renting of Immovable property service. The Appellant was collecting Royalty charges from group companies, in terms of agreements, for grant of permission for usage of the logo "TTK" on their packaging, cartons, containers, labels, brochures, etc. in connection with the products manufactured, sold or distributed by them. The Department alleged that service tax was payable under Intellectual Property Rights Service, on the consideration received in the form of Royalty Charges, for temporary transfer of Intellectual Property Rights (IPR), as the logo "TTK" was used as a Trademark rather than as an artistic work as defined under Copy Rights Act, 1957 (CRA). The Appellant maintained that service tax was not payable on the said Royalty charges as the said logo was registered as an artistic work under the CRA and hence excluded from the scope of IPR service. Hence, the Department issued the following Show Cause-cum-Demand Notices as per the details tabulated below : - Sl.Nos. SCN/SOD No. & Date Period Involved Amount demanded (Rs.) Demanding provision Penalties proposed 1 SCN No.30/2009 Dt. 6.03.2009 7/2007 to 3/2008 1,06,42,829 Proviso to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of Section 65(5a) ibid "under any law for the time being in force, but does not include copyright" was not interpreted in the right sense and the appellant ought to be given the benefit. iv. It was submitted that the impugned order had placed reliance on the decision in the case of M/s. Grasim Industries [2005 (185) ELT 123 (SC)], whereas the ratio in the case of M/s. Astra Pharmaceuticals (p) Ltd. [1995 (75) ELT 214 (SC)], under similar circumstances, is squarely applicable to the present issue. v. It was submitted that the impugned order was liable to be set aside as non est in law as the adjudicating authority ignored the ratio of the decisions cited by the Appellant. The Appellant placed reliance on the decisions in the case of Tarai Food Ltd. Vs. CCE, Meerut-II, M/s. Brown and Burk Pharmaceuticals Ltd. Vs. CCE, Chennai III [2007 (207) ELT 514 (Tri.-Chennai)] and M/s. Alfred Berg & Co. India Pvt. Ltd. Vs. CCE, Chennai [2007 (208) ELT 318 (Tri.-Chennai)]. vi. It was submitted that the 'ttk' logo only indicated the name of the group company or manufacturer and does not serve as an advertisement of a brand name or a trade name that the customer is li....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 8. The Ld. Counsel for the Appellant has stressed that the logo is not a trademark but a copyrighted artistic work and that the appellant is not liable to pay service tax under IPR services on the royalty income. Against this, the Department contends that the appellant was using the logo as a trademark recognized under the Trademark Act and that the appellants merely having registered the same under the Copyright Act would not make the logo not recognized as a trademark. It is also submitted by him that the logo does not have any artistic value and hence demand of service tax is sustainable. 9. We find that the logo `ttk' were only used to project the image of the manufacturer generally and did not establish any relationship between the mark and the products manufactured/ distributed by the group companies of the Appellant. It only is a house mark which is usually devised in the form of an emblem, word or both and it is for identification of the manufacturer/distributor. Therefore, this monograph which only identifies the manufacturer/distributor would not make the product patent or proprietary. The "House mark" is used generally as an emblem of the manufacturer/distributor ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f colours; and (i) in relation to Chapter XII (other than Section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and (ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark." Section 2(m)-"mark" includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof." "Definition of Copyright" "Section 14. Meaning of copyright -For the purposes of this Act, "copyright" means the exclusi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding embodying it; (ii) to sell or give on hire, or offer for sale or hire, any copy of the sound recording, regardless of whether such copy has been sold or given on hire on earlier occasions; (iii) to communicate the sound recording to the public. Explanation-For the purposes of this section, a copy which has been sold once shall be deemed to be a copy already in circulation." Section 2(c) "Artistic work" means- (i) a painting, a sculpture, a drawing (including a diagram, map, chart or plan), and engraving or a photograph, whether or not any such work possesses artistic quality; (ii) work of architecture; and (iii) any other work of artistic craftsmanship" 5.2 As seen above, the definition of IPR service excludes copyright. Undisputedly, the appellants have registered the logo 'ttk' under the Copyright Act. The department alleges that since they have referred the logo in their license agreement as a "trade name and also because the logo is used in relation to marketing and sale of goods, the same would be a trademark. The Ld. Consultant for the appellants has produced a copy of the registration of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ame to be Trademark and raised the demand under IPR services. The main contention made by the Revenue in the said case was that in the sub-licensing agreement as well as in the product licensing agreement, promotional licensing agreement and other agreements, the property shown in the schedule "powerful girls" had been referred as trademark. After analysing the definition of copyright and trademark, the Tribunal held that such cartoon characters fall under copyright only. The facts being similar in our view, the said decision is applicable to this case. Further, in the present case, the logo is registered under the Copyright Act. Relevant portion of the decision in the case of ESPN Software India Pvt. Ltd. is reproduced as under: - "38. Product Licensing Agreement and Promotional Licensing Agreements were executed between TENA and TIPL TIIPL i.e. Appellant No. 2 executed sub-licensing agreements between TIIPL. and Bombay Dyeing and Manufacturing Co. Ltd., TIIPL and M/s. Brittania Industries and TIIPL and M/s. Bata India Ltd. In case of Bombay Dyeing agreement was made for sub-licensing the property "Powerful Girls" for use in home furnishing. In Schedule A sub-licensed pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ings or animals. But then it narrows it by restricting the applicability of the tariff item to only such medicines which bear either on itself or on its container or both a name which is not specified in a monograph in a Pharmacopoeia. This obviously is not applicable to the appellant as the injections manufactured by the appellant are specified in a Pharmacopoeia. The other class of medicines to which this Explanation applies are those which have a brand name that is a name or a registered trademark under a Trade & Merchandise Marks Act. The medicine manufactured by the appellants is not registered under the Trade and Merchandise Marks Act. Therefore, it would attract levy only if its container or packing carried any distinctive marks so as to establish the relation between the medicine and the manufacturer. But the identification of a medicine should not be equated with the produce mark. Identification is compulsory under the Drug Rules. Technically, it is known as 'house mark'. In Narayan's Book on Trade Marks and Passing Off, the distinction between 'house mark' 'and product mark (brand name) is brought out thus, 677A. House mark and product mark (or brand name). I....