Customs, Excise and Gold Tribunal - Bangalore
Aravind Fashions Ltd. vs The Commissioner Of Service Tax on 5 February, 2007
Equivalent citations: [2007]9STJ168(CESTAT-BANGALORE), 2007[7]S.T.R.178, [2008]12STT143
ORDER S.L. Peeran, Member (J)
1. The stay application and appeal arise from Order-in-review No. 46/2006 dated 5.9.06 passed by the Commissioner of Service Tax Bangalore setting aside the order passed by the Assistant Commissioner granting relief to the assessee by dropping the demands. The demands raised pertain to service tax with regard to design, drawing and know-how received by the assessee for manufacture of certain goods. The Revenue proceeded to levy the service tax on the ground that this technical information/technical assistance/transfer of technical know-how received by them is required to be covered under the category of consulting engineer services. The Commissioner's order is challenged on the ground that the technical services received by them are not required to be covered under the category of consulting engineering services as the assessee is not carrying on any function as defined under the category of consulting engineer services. Learned Counsel submits that this very issue was the subject matter of several appeals before this bench and this bench on detailed consideration held that the receipt of technical assistance and information cannot be brought within the category of consulting engineers. The following judgments and the zist of the judgments as filed in the tabular column by the counsel is reproduced herein below.
Sl No Citation Gist
1. Bharat Electronics Ltd. and Ors v. CCE in final Order No. 1061 to 1063/06 dt 15.6.06 Service Tax is not leviable on transfer of technology
2. CCE v. Rubco Sales international (P) Ltd. 2006 (1) STR 291 (T-Bang) Transferring technical know-how would not come within the ambit of consulting engineering services
3. Amco Batteries Ltd. v. CCE 2006 (2) STR 345(T-Bang) Royalty for transfer of technology is not payment for consultancy and right to use trade mark is a transaction of property and no consultancy or advise is involved
4. CCE v. Micro Finish Valves (P) Ltd. 2006 (1) STR 283 (T-bang) Mere transfer of technical know-how cannot be brought within the ambit of consulting engineering services
5. Yamaha Motors (I) P Ltd., v. CCE (T) Consideration paid was not for any consultancy service but for transfer of intellectual property. It was further held that in a technical collaboration agreement, value of incidental advice, if any, cannot be cut out and subject to service tax as consulting engineering services.
6. Samsung Electronics Co Ltd. v. CCE 2006 (1) STR 217 (T) Know-how fee and royalty paid to holding company towards right to use trade mark, merely a transaction in property and not consultancy advice and service tax was not leviable
7. CCE v. Valeo Friction material India (P) Ltd.
Transfer of technology by foreign company to Indian company on payment of royalty in consideration of such transfer, is not a service and hence demand for service tax is not sustainable.
8. Bajaj Auto Ltd. v. CCE & C Royalty for right to use is transaction in property and no consultancy or advice is involved and is not liable to service tax
9. Navinon Ltd. v. CCE Royalty for technical know-how is a share of profit reserved by owner for permitting another person to use his property and is not payment for any service and its payer could not be liable to service tax.
10. Turbo energy Ltd., v. CCE Royalty paid to foreign supplier for transfer of technology is not payment of service but only a share of product or profit reserved by owner for permitting another the use of his property Learned Counsel submits that as the issue is already covered by the above noted judgments appeal itself could be allowed.
2. Learned DR reiterated the departmental contentions.
3. On a careful consideration, we notice that the Original Authority has given a detailed finding and held that receipt of technical assistance cannot come within the category of the definition of consulting engineer. However, the Commissioner reviewed the order and confirmed the demands. This very issue was subject matter of the several appeals before this Tribunal. In the above noted judgments in the tabulated column, it has been held that transfer of technical information/technical assistance/transfer of technical know-how, cannot be brought within the ambit of consulting engineer. Therefore, the impugned order passed by the Commissioner is not in terms of the ratio of the judgments cited supra. The Original order is correct in law. In that view of the matter, we are required to allow the stay application and appeal. The stay application and appeal are allowed in terms of the cited judgments with consequential relief if any.
(Pronounced and dictated in open court)