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2019 (12) TMI 184 - CESTAT HYDERABADIntellectual Property Service - assessee-appellant is supplying parent seeds under limited “Royalty bearing” licence - Whether there is any liability to Service Tax under Intellectual Property Service on the consideration received as Royalty? - extended period of limitation - HELD THAT:- Section 23 of the Protection of Plant Varieties and Farmers’ Rights Act, 2001 prescribes the procedure for registration under the Act and the issuance of certificate of registration is prescribed under Section 24 ibid. Further, Section 28 mandates the conferring of Right. Section 23 prescribes the detailed procedure requiring the Registrar to first satisfy itself with the requirements and thereafter get the application examined and only thereafter he shall forward such application with relevant documents to the authority under the Act. Finally, it is the authority which issues directions to the Registrar or rejects such application under the Act. Once the application for registration of a variety is approved i.e., accepted, only then the same is registered and the certificate of registration is issued in terms of Section 24 and only when such certificate of registration is issued under the Act, it shall confer an exclusive right in terms of Section 28 ibid. Mere filing of application would not lead an applicant anywhere and such applicant would not automatically become owner/holder of Right under the Act unless such right is conferred in terms of Section 28 after due process as prescribed under the said Act. Hence, one of the objections of the Revenue that mere filing is sufficient cannot survive. Any agreement between two parties inter se is civil in nature, which only binds the parties thereto to the terms or contents therein. Such agreements could also be financial in nature whereby consideration is being passed on, however, subject to certain acts/omissions/conditions or terms in such agreements. So, any failure on the part of one of the parties to such an agreement would only lead to a civil dispute, maybe for specific performance or enforcement or recovery, etc. - Such agreements, therefore, are binding only on the parties who bind themselves with the terms and conditions therein and no outsider would ever have or be influenced by any of the terms therein. As regards, the requirements of law, the governing statute is the PPV Act, according to which the Right flows from the moment the registration is granted. Once the application is filed, procedure follows, which is not just an empty formality. The governing statute thus confers and recognizes an applicant’s right, which thus satisfies the conditions in Section 65 (55a) read with Circular No. 80/10/2004, i.e., the applicant becomes holder/owner of Intellectual Property Right prescribed under the relevant Act i.e., the PPV Act, which for the time being is in force - thus, demand is not sustainable. Extended period of limitation - HELD THAT:- In the case on hand, admittedly, the appellant was not having the privileges of Right during most part of the disputed period and therefore, the requirements of charging Section read with the Board Circular No. 80/10/2004 remain largely unsatisfied. Hence, we do not entertain the Revenue’s plea and have to hold that the demand cannot sustain beyond the normal period - also, Ld. Adjudicating Authority has observed at paragraph 10 of the impugned order that the consideration was shown as ‘Royalty’ in the Books of Accounts of the appellant. So, this was not something that was suppressed or camouflaged so as to give the colour of fraud, suppression, mis-representation, etc., for invoking the larger period of limitation - extended period not invocable. The appeal is allowed both on merits as well as limitation.
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