Custom, Excise & Service Tax Tribunal
C.S.T., Delhi vs M/S. Taikisha Engineering India Ltd on 24 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066. Date of Hearing/Order : 24.10.2016 Appeal No.ST/833/2011-CU[DB] [Arising out of Order-in-Original No.09/RDN/2011, dated 28.02.2011 passed by CS.T., Delhi] C.S.T., Delhi Appellant Vs. M/s. Taikisha Engineering India Ltd. Respondent
Appearance Mr. Ranjan Khanna, DR - For Appellant Mr. Mayur Bhargava, CA - For Respondent CORAM: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. Ashok K Arya, Member (Technical) Final Order No. 55114/2016 , dated 24.10.2016 Per Mr. Ashok K Arya :
Revenue is in appeal against the Order-in- Original No.09/RDN/2011, dated 28.02.2011, whereunder the demand of service tax has been dropped against the respondent, namely, M/s. Taikisha Engineering India Ltd.
2. Revenue has been represented by Mr. Ranjan Khanna, ld. Departmental Representative and Mr.Bhargava, ld. Consultant for the Respondent.
3. The issue concerns with the fact of permanent transfer of IPR from M/s. Taikisha Engineering India Pvt. Ltd., Japan to the respondent, M/s. Taikisha Engineering Pvt. Ltd., India. The fact of permanent transfer of IPR and the agreement entered into between the Japan company and the Indian respondent are on record.
4. Considering the fact that the IPRs are permanently transferred to the respondent though agreement says that consideration/payment for that was to take place in the form of payment of royalty/fee amounting to certain percentage of value of profits on mutual consent, it does not mean that permanent transfer has not taken place. We take note of the Boards circular No.80/10/2004, dated 17.09.2004. It is clear from that circular that permanent transfer of IPRs would not be covered under taxable service. The contents of the relevant para of the said circular are reproduced below:-
9. Intellectual property services (other than copyrights):
9.1 .....
9.2 A permanent transfer of intellectual property right does not amount to rendering of service. On such transfer, the person selling these rights no longer remains a ''holder of intellectual property right'' so as to come under the purview of taxable service. Thus, there would not be any service tax on permanent transfer of IPRs. 4.1 Considering above discussions, the appeal filed by Revenue does not have merits. Accordingly, we the impugned order sustains and the appeal is rejected.
(Archana Wadhwa) Member (Judicial) (Ashok K Arya) Member (Technical) SSK -3-