Customs, Excise and Gold Tribunal - Bangalore
Bst Limited vs Commissioner Of Central Excise on 10 May, 2006
Equivalent citations: [2007]6STT87
JUDGMENT T.K. Jayaraman, Member (T)
1. The stay and appeal have been filed against Order-in-Appeal No. 1/2005-ST, dated 21-9-2005 passed by the Commissioner of Customs and Central Excise, Cochin.
2. The appellants are manufacturers of audio systems. They were having Technical Assistance Agreement with the foreign collaborator M/s. Sanyo Technosound Co. Ltd. According to the terms of agreement, the appellants are required to pay royalty for the technical know-how received from the foreign collaborator. The Revenue proceeded against the appellant on the ground that the foreign collaborator are rendering the services of 'consulting engineer', which is liable to Service tax under proviso to Rule 6(1) of Service Tax Rules, 1994. During the relevant period, the receiver of the services or an authorised agent of the foreign collaborator is supposed to discharge the service tax liability. The lower authority has confirmed the demand of Rs. 3,48,213/- for the period from 6-10-2000 to 21-5-2001 and various penalties Under Sections 76, 77 and 78 have been imposed on the appellants.
3. Smt. Rukmani Menon, Advocate appeared for appellant and Shri K. S. Reddy, JDR for the Revenue.
4. The learned Advocate urged that this issue has already been covered by large number of decisions of the Tribunals including this Tribunal. She relied on the following decisions of the Tribunal wherein it has been held that the technical know-how given by the foreign collaborator would not amount to the services of the 'consulting engineer'. Hence, it was urged that the demands and penalties are liable to be set aside.
I. Navinon Ltd. v. CCE, Mumbai-VI .
II. CCE, Chennai-III v. Veleo Friction Material India Pvt. Ltd. - .
III. Pfizer Ltd. v. CCE, Mumbai - .
IV. Kerala State Electricity Board v. CCE, Thiruvananthapuram - .
V. Yamaha Motors (I) Pvt. Ltd. v. CCE - .
Moreover, it was pointed out that Rule 6 (1) of the Service Tax Rules has been amended w.e.f. 28-2-1999, according to which only an authorised agent of the foreign collaborator will be liable to pay the service tax. In the present case, she pointed out that the appellant is not at all an authorised agent and therefore, they are not liable for payment of tax under the provisions of Rule 6 (1).
5. The learned JDR invited our attention to the Technical Assistance Agreement entered by the appellants with the foreign collaborators and said that as per Article 8.06 of the agreement, the appellant is required to bear all the tax liability in India. Therefore, the lower authorities confirmed the demand.
6. We have gone through the records of the case carefully. The main issue to be decided is whether the services received in India would amount to services of a 'consulting engineer' as per the Finance Act, 1994. The learned Advocate cited a large number of decisions and in all these cases it has been categorically held that technical know-how received from the foreign collaborator would not amount to the services of 'consulting engineer'. Since the facts of the present case are similar to the case laws cited by the learned Advocate, we are of the view that these services would not be liable for payment of Service tax, during the relevant period in the category of the 'consulting engineers'. Since the basic issue stands settled, all other points raised are rendered irrelevant. Therefore, we do not want to go into the other legal aspects raised by the learned Advocate. In these circumstances, the demand of Service tax and imposition of penalties under the various sections of the Finance Act are not justified, hence, we set aside the impugned order. The stay and appeal are allowed with consequential relief.
(pronounced and dictated in open Court)