Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2015 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 1052 - AT - Service TaxIntellectual property rights service - Payment of royalty on account of technical know-how charges - Bar of limitation - Held that:- Technology Transfer Agreement read with Share Purchase Agreement clearly points to the provision of two services by Rochem AG Switzerland, namely, the service of providing technology transfer and the service of providing intellectual property right transfer. The Commissioner is right in holding that the Share Purchase Agreement is inextricably linked to the Technology Transfer Agreement by virtue of Article 4 Non-competition. Further, Article 4 also recognizes that appellant have been using the trademark and logo “Rochem”. However, the Commissioner failed to analyze the Agreements in detail and came to a hasty conclusion that the entire amount of royalty is towards transfer of Intellectual property Right. - Only rights which are registered with the trademark/patent authorities are considered as Intellectual Property Right. The Commissioner has failed to go into these aspects in detail and has clubbed the entire service as Intellectual Property Right service. Charge of service tax is under Section 66 but the appellant being the receiver is liable to pay under Section 66A. The Commissioner's reasoning is not correct and is rejected. The appellants are eligible to benefit from notification No. 17/2004. - Commissioner has not analyzed the case on merits. He has not justified that the royalty amount is paid entirely for import of Intellectual Property Right services. He has wrongly disallowed the benefit of notification No. 17/2004. Section 78 provides that where the service tax has not been paid because of fraud, collusion, willful misstatement or suppression of facts or contravention of any of the provisions with intent to evade payment of duty, the liability of penalty will be equal to the amount of service tax not paid. We fail to understand how Commissioner has come to the conclusion that the ingredients of both the sections are different. If the reason for waiving penalty under Section 78 in terms of the provisions of Section 80 are that there was confusion about the scope of leviability on service receivers under reverse charge mechanism, then, it is the same confusion because of which the appellants had not declared the fact of receiving service by way of import. In fact, the appellants case is even stronger because it has not even been established convincingly by the Commissioner that the service receive is entirely covered under the category of Intellectual Property Right Services. - Following decision of CCE Vs. Indian Institute of Chemical Technology [2012 (9) TMI 236 - ANDHRA PRADESH HIGH COURT] - limitation period will apply and the demand is time barred - Decided in favour of assessee.
|