TaxTMI 
TaxTMI 
2026 (7) TMI 527
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....2. The Appellant is engaged in bus body building on the bus purchased by them and for this activity, they received Intellectual Property Right (IPR) from their parent unit that is M/s. Volvo Bus Corporation, Sweden under an agreement called "Technical License Contract Agreement". According to the department, this "Technical License Contract Agreement" comes under the purview of section 65(55a) of the Finance Act, 1994; hence, demanded service tax on the amount paid as royalty by the appellant to their parent company. The Commissioner in the impugned order confirmed the demand on the ground that the Technical Know-how Agreement is for the purpose of producing the buses, producing and assembling components for the use in assembly of buses, pr....
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....amely trademarks, designs, patents or any other similar intangible property, under any law for the time being in force, but does not include copy;" 3.1 He further stated that department vide F. No.B2/8/2004-TRU dated 10.09.2004 clarified that only those IPR covered under Indian laws in force at present alone are chargeable to service tax, thus, appellant submit that the technical know-how received by them was not registered under any of the Indian laws in force and therefore, the question paying service tax on IPR services does not arise. Relying on the decision of ABB Limited vs. Commission of Central Excise and Service Tax: 2019 24 GSTL 55 (Tri. -Bang.), it is submitted that receipt of technical know-how does not amount to service whic....
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....ction 65(55a) and (55b), which are extracted below: Section 65(55a) "intellectual property right" means any right to intangible property, namely, trademarks, designs, patients patents or any other similar intangible property, under any law for the time being in force, but does not include copyright; Section 65(55b) "intellectual property service" means- (a) transferring temporarily; or (b) permitting the use of enjoyment of any intellectual property right; 7. On perusal of the "Technical License Contract Agreement" entered into by the appellant with their parent company at Sweden, we find that the relevant clauses read as follows: 2. Scope of License and Obligations 2.1 The objective ....
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....ates. From these Clauses, it is clear that the appellant has no right or claim to use the trademarks, trade names, model rights, design rights etc. At Clause 12.1, the royalty payments are in consideration for the license granted as specified at Clause 2.2; thus, proving the fact that the royalty payments are for technical documentation and know-how. 8. We also find that in the appellant's own case, this Tribunal vide Final Order No.21586/2017 dated 10.08.2017, in identical set of facts, held as follows: "4. We have heard both sides and perused the appeal records. We note in the present case, the Commissioner did not bring out the existence of any such IPR in the transaction between the appellant and the holding company in Sw....