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2017 (11) TMI 288 - AT - Service TaxIntellectual property rights service - scope of service - failure to pay service tax on the provision of technical know-how - time limitation - Held that: - The appellants have relied on the decision of the Tribunal in the case of Mormugao Port Trust Versus Commissioner of Customs, Central Excise & Service Tax, Goa- (Vice-Versa) [2016 (11) TMI 520 - CESTAT MUMBAI] to assert that any payment made by a joint venture to participating company cannot be treated as consideration for the service. It is seen that the said decision was passed wherein the appellants had clearly claimed that the royalty earned was not a consideration towards renting of immovable property but it was the share of Revenue from services which were jointly rendered by the assesee and the joint venture - in the instant case, there is no claim to the effect on royalty paid is the share of profit from the joint venture to Vemmar SRL, Italy. The appellant company has specified shares of each of the participates in the joint venture in the ratio of 51%, 35% and 14% respectively. Any share of the profit if distributed has to go to each of the partner in the ratio of their shares. In the instant case, Vemmar SRL, Italy is receiving the said amount. Thus, the payment made to Vemmar SRL, Itay cannot be considered as share of its profit of the joint venture. Thus, the facts are different in the instant case and therefore, the decision of the Tribunal in the case of Mormugoa Port Trust (supra) cannot be applied to the instant case. The legal provisions defining the nature and scope of taxable service, namely intellectual Property Right & Intellectual Property Service are defined under clauses (55a) and (55b) of Section 65 of Chapter V of the Finance Act, 1994. The Intellectual Property Right means any right to intangible property namely, trademarks, designs, patents or any other similar intangible property, under any law for the time being in force, but does not include copyright. In the present case I find that the services received by the noticee includes Product &Process Technology required for manufacture of helmets. The JVA allows transfer of services on temporary basis and those services appears to be provided by a person who has established a business or has a fixed establishment from which the service is provided and his permanent address or usual place of residence is outside India. Under these facts, I hold that the services received by the notice are falling under the category of taxable service. Thus this taxable service is to be treated as if the recipient had himself provided the service in India. Extended period of limitation - Held that: - the show-cause notice has been issued within the period of five years prescribed under the clause pertaining to extended period of limitation. The date of knowledge of department has no relevance if the extended period has been invoked on the grounds mentioned under Section 73 of the Finance Act. Revenue neutrality - Held that: - availability of credit to the appellant of such duty paid has not been examined by the impugned order. We are of the view that the said issue is an important issue which needs to be examined before any findings on invocation extended period of limitation are given. The revenue neutrality has an implication on the invocation of extended period of limitation. Penalties - invocation of section 80 - Held that: - the said issue also needs to be decided after examining the issue of revenue neutrality. Appeal allowed by way of remand.
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