Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Kayaba Industry Co. Ltd on 19 June, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. ST/328/05 (Arising out of Order-in-Appeal No. P-III/289/05 dated 5.9.2005 passed by the Commissioner of Central Excise (Appeals), Pune-III). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Central Excise, Pune-III Appellant Vs. M/s Kayaba Industry Co. Ltd. Respondent Appearance: Shri D.D. Joshi, Superintendent (AR) for Appellant None for Respondent CORAM: SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 19.06.2013 Date of Decision: 19.06.2013 ORDER NO. Per: P.R. Chandrasekharan
The appeal filed by the Revenue is directed against Order-in-Appeal No. P-III/289/05 dated 5.9.2005 passed by the Commissioner of Central Excise (Appeals), Pune-III.
2. The respondent M/s Kayaba Industry Co. Ltd., Tokyo, Japan (Kayaba in short) provided technical know-how and assistance for manufacturing of ride control products to M/s Gabriel India Ltd. (Gabriel in short), Pune and for the said services rendered, M/s Gabriel paid a lump-sum amount of US $ 3,10,000/-. The department was of the view that the services rendered by M/s Kayaba is taxable under the category of Consulting Engineers Services and accordingly, a Service Tax demand of Rs.63,641/- was confirmed along with interest and penalties. The respondent preferred an appeal before the lower appellate authority, who after going through the agreement held that in view of the Tribunals decision in the case of M/s Bajaj Auto Ltd. Navinon Ltd., Araco Corpn., Samsung Electronics India Ltd. and Turbo Energy Ltd., the services provided by the respondent did not come under the category of Consulting Engineers Service. Accordingly, the lower appellate authority allowed the appeal. Aggrieved of the same, the appellant is before us.
3. In the appeal memorandum, the Revenue has urged that the activity of supply of technical know-how and assistance would come within the scope of Consulting Engineers Service. It is further submitted that when the service has been provided in India by the respondent, therefore, the service provider is liable to pay Service Tax. It is further argued that decision of the Tribunal in the case of M/s Bajaj Auto Ltd. and M/s Navinon Ltd. have been appealed against by the department before the Hon'ble High Court and the matter is pending. Therefore, the Revenue prays for setting aside the impugned order and allowing the appeal.
4. The learned Superintendent (AR) appearing for the Revenue reiterates the grounds urged in the appeal memorandum.
5. None appeared for the respondent.
6. We have gone through the technical know-how and assistance agreement by M/s Kayaba and M/s Gabriel India and the same is for supply of technical know-how and information and technical assistance relating to manufacture of shock absorbers and struts for automobiles. The information provided pertains to the specifications, manufacturing processes and techniques for the manufacture, assembly and inspection of products and parts. For supply of the said technical know-how, the recipient of the service M/s Gabriel is required to pay a running royalty to the service provider in addition to initial payment of US $3,10,000/-. From the terms and condition of the agreement, it is clear that the foreign service provider did not render any advice in manufacturing of the shock absorbers and struts for automobile, so as to come within the category of Consulting Engineers Service. What has been provided is technical know-how in relation to various automobile products. Such technical know-how would come under the category of Intellectual Property Right, therefore, we do not find any infirmity in the order of the appellate authority holding that the services rendered by the foreign service provider does not come under the category of Consulting Engineers Service. Further, the Tribunal in a number of cases cited supra, held that supply of Technical Know-how wound not come within the category of Consulting Engineers Service. In some cases, the Revenue has filed appeal against the order of the Tribunal before the Hon'ble High Court, but no stay has been obtained by Revenue against the operation of these orders. In view of this, we have to follow the precedent decisions given by this Tribunal.
7. Accordingly, we do not find any merit in the Revenues appeal and the same is dismissed.
(Dictated and pronounced in Court)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
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