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14. Ld. Sr. Advocate submits that demand has also been confirmed under Intellectual Property Right service on 98% of licensing/sub licensing fees because predominant nature of licensed property was held to be trade mark and not copy right. He submits that licensed products by TENA to TIPL are cartoon network characters (all Cartoon Network Originates and sesame characters) and these characters are nothing but artistic work as defined under Copyright Act 1957 and not trademarks. Therefore this demand is also not sustainable.

(i) a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality;

(ii) work of architecture; and

(iii) any other work of artistic craftsmanship. The dispute relates to Cartoon Characters. It is the contention of the assessee that Cartoon Characters are created by TENA and are the artistic work and are clearly covered under Copyright Act whereas Revenue contests that these are Trademarks and not artistic work and are thus covered under IPR Services.

38. Product Licensing Agreement and Promotional Licensing Agreements were executed between TENA and TIIPL. TIIPL i.e. Appellant No. 2 executed sub licensing agreements between TIIPL and Bombay Dyeing and Manufacturing Co. Ltd., TIIPL and M/s Brittania Industries and TIIPL and M/s Bata India Ltd. In case of Bombay Dyeing agreement was made for sub licensing the property Powerful Girls for use in home furnishing. In Schedule A sub licensed properties were listed as PPG, Dexter Laboratory, Johny Bravo, Courage, Cow & Chicken, Codername Kids Next Door, CN Logo and all related Characters and Elements had been shown as Trademark of Cartoon Network. Similarly in case Brittania Industries sub licensed property is Tom and Jerry for use on erasers, pencils and magnetic slap on a wrist bands for promotion of product of Brittania Industries. In Schedule A of Licensed Property and Trademark Notices of sub licensing agreements PPG, Dexters Laboratory, Johney Bravo etc. and all the related Characters and Elements are shown as Trademark of Cartoon Network. Similarly in case of Bata India sub licences property is Ben 10 to be used for promotion of Bata School Shoes, shoe accessories and school bags. From Schedule A of the agreement it is clear that Character and Elements are shown as Trademark of Cartoon Network

44. Commissioner has also confirmed the demand under Business Auxiliary Service for marketing of Cartoon Network and POGO channel for the period 2005-06 and 2007-08. Appellant has recovered the reimbursable expense incurred by them during the course of marketing TENA TV channel namely cartoon network and POGO channel etc. It is the contention of the Revenue that these expenses were incurred for marketing TENA channels and are therefore covered under Business Auxiliary Service and Commissioner has confirmed the demand holding that service tax is leviable on gross amount charged under Section 67 of the Act. We find that Delhi High Court in case of International Consultant and Technocrat  2012-VIL-106/DEL-57 has held that reimbursable charges for rendition of taxable service cannot form part of gross amount charged towards taxable service. We therefore following the judgement of Delhi High Court set aside that part of demand.