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2014 (12) TMI 1165 - AT - Service TaxWaiver of pre deposit - Intellectual Property Right service - Penalty u/s 77 & 78 - Held that:- No element of temporality, either in inherence of title in the technical drawings in favour of the petitioner nor in the period for which the petitioner may beneficially use the know-how pursuant to the permanent transfer of technical drawings nor in the extent of the rights to use the technical know-how is evident. The agreement clearly and exclusively transfers permanently the technical drawings. Therefore, the transaction prima facie falls more appropriately within the ambit of sub-clause (a) of Section 65(66b) of the Act but is excluded therefrom in view of exclusion of permanent transfers from the ambit of the sub-clause. - On a prima facie construction of the terms of the agreement read as a whole and a holistic construction of its conditions and covenants, the conclusion is compelling that there is a permanent transfer of intangible goods, from the Swedish entity to the petitioner. Therefore the transaction falls outside the ambit of Section 65(55b)(a) of the Finance Act, 1994, since only a temporary transfer of Intellectual Property is comprehended within the meaning of sub-clause (a) i.e., Intellectual Property Right and the agreement between the parties discloses not a temporary but a permanent transfer. - Strong prima facie case in favour of the appellant - Stay granted.
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