TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1025
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....u Petrochemical Products Limited, Indian Oil Corporation Limited, Hindustan Petroleum Limited, Indian Petrochemical Corporation Limited (referred to as 'Petroleum Companies in India'), vide which it granted non-exclusive and non-transferable right to use the licensed technology, which was patented outside India, to Petroleum Companies in India; the Petroleum Companies in India had agreed to pay a fixed consideration, to overseas entity, at pre-determined intervals, in terms of the 'License Agreement'; the Intellectual Property rights, however are registered outside India; Appellant was also registered with the Service Tax Authorities under the category of 'Consulting Engineering Services'; the liaison office of UOP Asia Ltd, a Group Company of the Appellant, was used by the Appellant for the specific purpose of collection and remission of Service Tax to the Authorities; the same was done with prior authorization from the Reserve Bank of India (or "RBI"). 2.1. Alleging that the appellants are required to pay the service Tax on the services received by them from the overseas entity as per Rule 2(1)(d)(iv) of the Service Tax Rules,1994 under the category of 'IPR services' as per th....
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....nition makes it abundantly clear that the taxable event is 'transfer of' or 'grant of permission to use' and not the actual use or enjoyment of the intellectual property by the recipient of services; in the present case, the transfer of 'patent rights' by the Appellant to Petroleum Companies in India was a 'perpetual transfer', which was a onetime event, and no further rights/processes/upgrades were provided to them; taxable event occurred prior to date of enforcement of IPR services under Service Tax, notwithstanding that the consideration was to flow even beyond the said date; the position of law is no more res integra that the taxable event of 'transfer' happens only once and cannot be treated as a continuous activity merely because the consideration for such transfer is paid in pre-determined intervals as per the terms agreed between parties. it was held in Modi Mundipharma Pvt Ltd CCE (2009-TIOL-968) that receipt of the know how is a one-time affair and not a continuous activity. 5. Learned Counsel submits further that Service Tax on import of services was legally permissible only after introduction of Section 66A in Finance Act. 1944 w.e.f. 18.04.2006 as he....
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....on of Engineering Services. The appellant submits that the Services were provided entirely from outside of India and no part of the said Services were ever performed in India. The impugned order confirms the demands for the reasons that * the Indian office is involved in collection of fee from the Indian customers and the fee is related to the period of use and goods produced by their clients; it cannot be said that the representative office is not involved in rendering services; they are not undertaking any separate activity independent of the services rendered in India; the Indian branch office is part of the service provider and they have taken the service tax registration for the services provided by the Noticee. * services provided by the noticee were covered under IPR services for which the consideration was received by them from time to time; consideration was based on the time and production made by the Clients; as such, the services provided by the noticee under the agreements were not one time services but continuous services; the noticee has granted right to use the process and technical information for the same after expiry of the agreement unless and ....
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.... of India Company registered under the Companies Act, 1956, ("LICENSEE") having its registered office at 17. Jamshedji Tata Road, Churchgate, Mumbai-400020, India, and which expression shall include its successors, executors and permitted assigns. Article 1. Background LICENSEE would like UOP to provide engineering services for a UOP Naphtha Hydrotreating Process Unit including a naphtha splitter column ("NHT Unit") and a CCR Platforming g Process Unit ("CCR Unit"), which LICENSEE intends to install in its refinery at Visakhapatnam, India, for operation of the aforesaid CCR Unit under a UOP Platforming Process License of even date herewith between UOP and LICENSEE. Article 5. Payments LICENSEE will pay UOP according to Attachment I for the services provided by UOP under this agreement. 1.0 Charges 1.1 LICENSEE will pay UOP a lumpsum fixed price of US$1,070,000 (One million, seventy thousand US Dollars Only), net of taxes, for the services specified in Attachment II, other than the training services specified in Attachment II, paragraph 9.0. This price will be paid by LICENSEE as follows: a. 15% within 60 days of receipt....
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....performed outside of India. Payments 7.1 RELIANCE will pay UOP according to Attachment IV for the services provided by UOP under this Agreement. 7.2 RELIANCE will pay royalties and provide statements of operations of the Unit to UOP according to Attachment V. Payments Unless otherwise specified, UOP's charges are designated in U.S.A. Dollars, and RELIANCE will pay UOP's charges in U.S.A. Dollars upon receipt of UOP's invoice. 12. it is clear from the agreements that M/s UOP LLC provided the services related to Grant of Patent, Supply of Engineering designs and Provision of Engineering Services. It is not dispute that said patents and IPR are registered in USA. The terms of the agreement indicate that the payment for such transfers is to be made in USD. The liaison office of UOP Asia Ltd, a group company, is registered in India, collected the payments from Indian Petroleum companies and remitted the same to the parent company. We find that neither the Show Cause Notice nor the impugned order established that the liaison office in India has provided the services on their own to the Indian Petroleum companies. In case the lia....
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....mined intervals as per the terms agreed between parties. We find support in the decision of the tribunal in the case of Modi Mundipharma 2009 (15) STR-713. Tribunal held that since services were rendered in 1990, the liability to pay Service Tax would not arise merely because the payment installments were received after 10.09.2004. We find that it was similarly held by apex Court in 20th Century Finance Corporation Ltd 2009 [119] STC 18 and by Tribunal in the cases of Art leasing Ltd 2007 (8) STR 162 and Reliance Industries Ltd 2008 -TIOL- 283- CESTAT AHM. 14. We further find that when the services are provided by a service provider located outside India, there was no way to tax the same for the lack of Jurisdiction. The same was clarified by Circular No. 36/4/2001 dated 08.10.2001 stating that the services provided beyond territorial waters of India are not liable to service tax as provisions of Services Tax have not been extended to such areas to a service recipient in India. The presence of a liaison office in India would not have made any such difference. The only way such services could have been taxed was after the insertion of Section 66A with effect from 18.04.2006. we f....
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....effect from 18-42006 or otherwise. The appellants during the course of personal hearing have cited the judgement in the case of Indian Shipowners Association v. UOI wherein the Hon'ble Supreme Court of India had dismissed the petition filed by Central Government challenging the order of the Hon'ble Bombay High Court. The Hon'ble Bombay High Court - 2009 (13) S.T.R. 235 (BOM), held that "it appears that it is first tie when the Act was amended and Section 66A was inserted by Finance Act, 2006 with effect from 18-4-2006, the respondents got legal authority to levy service tax on the recipients of taxable service. Now, because of the enactment of Section 66A, a person who is resident in India or business in India becomes liable to be levied service tax when he receives service outside India from a person who is non resident or is from outside India. Before enactment of Section 66A it is apparent that there was no authority vested by law in the Respondents to levy service tax on a person who is resident in India, but who received services outside India... Thus, in view of the above decision of Hon'ble Bombay High Court it becomes clear that reverse charge tax shift mechanism operating ....