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2023 (8) TMI 1320 - CESTAT CHANDIGARHLevy of Service Tax - Business Auxiliary Service - amount of royalty paid to overseas entity and the commission received from Greg Norman Division for identifying and negotiating with Indian exporters - Reverse charge mechanism - consideration received from Matrix Clothing Pvt. Ltd, Super Fashion and Paragon Apparel for importing assistance with respect to exports - Technical Inspection and Certification Service - time limitation. Taxability of the royalty received by the appellants from their masters for the technical know-how received from them under an Agreement - HELD THAT:- There is no mention of any patent of any design etc. being registered in India. Also, there is no mention of any separate payment for the different constituents forming part of the know-how - Tribunal has been taken a consistent stand that transferring of technical know-how cannot be equated to transfer of Intellectual Property Right and that as long as the said Intellectual Property Right is not registered or patented in India; the same would not qualify to be IPR taxable in India in terms of Section 65 (55a) of Finance Act, 1994. The Tribunal in the case of ASEA BROWN BOVERI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, LTU [2016 (7) TMI 559 - CESTAT BANGALORE] observed that the service(s) if any, provided by the foreign companies by way of transfer of subject matter(s) under respective agreements to the appellants cannot be covered under the taxable service of 'Intellectual Property Service' as defined under Section 65(105)(zzr) of the Finance Act, 1994. This Bench in the case of Schneider Electric India Pvt. Ltd. [2023 (6) TMI 1198 - CESTAT CHANDIGARH] considered all the earlier judgments of the Tribunal and came to a considered conclusion that technical know-how is not taxable unless the same is shown to have been registered in India - In the instant case too, it is found that the Department did not produce any evidence to show that the technical know-how or any constituent items therein have been registered in India. This being the case, there are no reason to differ with own finding given in the case of Schneider Electric and in the case of ABB Ltd. - thus, no case has been made by the Department to recover service tax from the appellants in the impugned case. The appellants have also contended that the taxable event having taken place much earlier to the levy of service tax on Intellectual Property Rights, no service tax can be levied on the same in the instant case as the Agreement was made in 1995 and was renewed in 2002 - the Larger Bench in the case of Arcelor Mittal Stainless (India) Pvt. Ltd. [2023 (8) TMI 107 - CESTAT MUMBAI] held that: concept that service tax is a destination-based consumption tax is also in conformity with international practice in respect of vale added taxes. Thus, in a destination-based consumption tax, the tax is levied only at the place where the consumption takes place. It is for this reason that exports are not taxed and imports are taxed on same basis as domestic supplies. In respect of all the issues raised in the show-cause notice, Revenue did not make out any case for levy of service tax on the appellants. The impugned orders, thus, cannot be sustained and are liable to be set aside - Appeal allowed.
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