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2019 (1) TMI 1037 - AT - Service TaxReverse charge mechanism - services received by the appellant from the service providers situated abroad - Intellectual Property Right service on transfer of technical know-how - activity of technical testing and analysis rendered outside India - commercial training or coaching service rendered outside India - sub-section (1) of Section 73(1) of the Finance Act, 1994 - extended period of limitation - penalty. Intellectual Property Right service on transfer of technical know-how - Held that:- Know-how is not recognized as Intellectual Property law by any Indian Law for the time being in force. In fact know-how is the undisclosed information cited by the Department clarification dt. 10/09/2004 as example of intellectual property right not covered by any Indian law. The transaction in the present case was for know-how which is in the nature of property, no service was provided by the foreign companies - there cannot be any service tax on technical know-how - demand set aside. Activity of technical testing and analysis rendered outside India - Held that:- Though the appellant had challenged the same but during the course of argument, the learned counsel for the appellant submitted that they are not challenging the same. Commercial training or coaching service rendered outside India - Held that:- The seminar was exclusively conducted outside India. Further, it is found that appellant has also attached the copies of the certificates showing the payment for the seminar which were conducted outside the country. In view of these facts, it can be said that since training and coaching service happened outside India, the appellants were not liable to pay service tax as the same is excluded from the ambit of Rule 3(1)(ii) of the Rules. Extended period of limitation - penalty - Held that:- The Department has invoked the extended period of limitation as the period of dispute relates to January 2007 to December 2007 but the show-cause notice was issued on 20/10/2008 - the Department was aware of all the payments made by the appellant to their foreign companies for transfer of technical knowhow which came to the knowledge of the Department in July 2005 itself and show-cause notice was issued - further, in the present case, the demand is on reverse charge basis in terms of Section 66A of the Finance Act and the appellant will be entitled to take the credit of entire service tax and the entire exercise is revenue neutral - extended period of limitation is not invocable - no penalty can be imposed on the appellant sunder Section 78 of the Act. Appeal allowed in part.
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