Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & ... vs Mahindra & Mahindra Ltd on 15 February, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. ST/238/05 (Arising out of Order-in-Appeal No. CEX.XI/JMJ/124/APL/NSK/2005 dated 10.6.2005 passed by Commissioner of Central Excise & Customs (Appeals), Nashik) For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) and Honble Mr. Sahab Singh, Member (Technical) ======================================================
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 & Customs, Nashik Appellant Vs. Mahindra & Mahindra Ltd. Respondent Appearance: Shri W.L. Hangshing, Authorised Representative (JCDR), for appellant Shri Bharat Raichandani, Advocate, for respondent CORAM: Honble Mr. P.G. Chacko, Member (Judicial) and Honble Mr. Sahab Singh, Member (Technical) Date of Hearing: 15.2.2011 Date of Decision: 15.2.2011 ORDER NO Per: P.G. Chacko
In this appeal filed by the Revenue, the short question arising for consideration is whether service tax is leviable on the technical know-how fees and royalties paid by the respondent to their foreign collaborators, under the head consulting engineer service for the period 7.7.1997 to 15.8.2002. We have examined the records and heard both sides. It is not in dispute that the respondent paid technical know-how fees and royalties to the 44 parties named in annexure B to the show-cause notice. It appears from the nature of transactions between the respondent and the aforesaid agencies that the respondent received technical know-how and assistance from the said agencies for the purpose of manufacturing motor vehicles (SCORPIO) in India. Apparently, the nature of transactions indicates that, as on today, it involves IPR service (intellectual property right service), which was not taxable prior to 10.9.2004. The question to be considered is whether the said transactions were chargeable to service tax under the head consulting engineer service during the period from 7.7.1997 to 15.8.2002. Identical question was answered in the negative on a similar set of facts in the case of Navinon Ltd. vs. CCE, Mumbai-VI 2004 (116) ECR 384 (Tri.-Mumbai). Similarly, in the case of Bajaj Auto Ltd. vs. CCE, Aurangabad 2005 (179) ELT 481 (Tri.-Mumbai) also, identical question was answered in the negative on a similar set of facts for a comparable period. The lower appellate authority relied on these decisions of the Tribunal and set aside the order passed by the original authority. In the present appeal of the Revenue, it is stated that the department preferred appeals to the Bombay High Court against the Tribunals decision in Navinon case and the Bajaj Auto case and, therefore, neither of the cases is liable to be followed as a precedent. The learned JCDR has reiterated this ground of the Revenues appeal. In answer to a query from the Bench, he submits that there is no stay of operation of the Tribunals orders in Navinon case and Bajaj Auto case. In other words, the decision in the two cases is in operation and can be followed as a precedent.
2. The learned counsel for the respondent has placed on record a plethora of other decisions of this Tribunal, various High Courts and the Supreme Court. These include Betts UK Ltd. vs. CCE, Goa 2006 (4) STR 433 (Tri.-Mumbai), wherein it was held that transfer of technology and technical assistance by a foreign company to the Indian company against payment of royalty was not liable to service tax under Section 65 of the Finance Act, 1994. We are inclined to follow this precedent of this Bench. A similar situation is noticed in Ispat Industries Ltd. vs. CCE, Raigad 2007 (8) STR 282 (Tri.-Mumbai).
3. The question whether the respondent should pay service tax under the head consulting engineer service in respect of the transactions in question for the period from 7.7.1997 to 15.8.2002 can be settled by following the precedent cited by the counsel in the absence of stay of operation of those decisions. Accordingly, we sustain the impugned order and reject this appeal.
4. As indicated by the learned JCDR, the order-in-original in toto was set aside by the Commissioner (Appeals) regardless of the fact that M/s. Camtek, from whom also technical know-how/assistance was received by the respondent during the material period, were not an agency located abroad. It is, therefore, made clear that the order passed by the Commissioner (Appeals) should be understood to have set aside the order-in-original except in relation to M/s. Camtek. The order-in-appeal so understood stands sustained.
(Pronounced in Court) (Sahab Singh) Member (Technical) (P.G. Chacko) Member (Judicial) tvu 1 4