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2015 (1) TMI 1143 - CESTAT NEW DELHITaxability of Royalty - transfer of technology for manufacture of ball bearings - Consulting Engineer Service - Held that:- Respondent is a company incorporated in and operating from USA and has no branch office or any business establishment whatsoever in India. There is also no dispute that the service provided is transfer of technology for manufacture of ball bearings under licence agreement with M/s. NEI Ltd., Jaipur against payment of royalty. The service tax is sought to be recovered on the amount of royalty received by the respondent from M/s. NEI during the period 2003-04. First of all, in our view, the service provided by the respondent to M/s. NEI is not the service of Consulting Engineer but is Intellectual Property service, which became taxable w.e.f. 10-9-2004 under Section 65(105)(zzr) and, therefore, during the period of dispute, the service provided by the respondent would not attract any service tax. Such receipt of a taxable service by a person in India from a foreign service provider became taxable by making the service recipient as the person liable to pay the service tax with effect from 18-4-2006 by introducing Section 66A of the Finance Act, 1994 and hence, during the period of dispute prior to this date, the service tax could not be demanded even from the service recipient. We also find that the findings of the Commissioner (Appeals) that no service tax can be recovered from the respondent, a company incorporated in USA and operating from USA and not having any branch or establishment in India are based on the judgments of the Tribunal in the cases of Relax Safety Industries & Others (2002 (4) TMI 143 - CEGAT, MUMBAI) and Philcorp Pte. Ltd. (2007 (3) TMI 93 - CESTAT, MUMBAI), wherein it was held that the service tax demand was not applicable to a person or company located outside India having no business or establishment in India. In view of this, we find no illegality or impropriety in the impugned order. - Decided against Revenue.
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