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2018 (12) TMI 866 - AT - Service TaxTransfer of intellectual property right service - transfer of Goodwill - scope of definition under section 65(55b) of Finance Act,1994 - Held that:- The Tribunal in the case of Alstom T&D [2018 (2) TMI 148 - CESTAT CHENNAI] had occasion to analyze a similar issue wherein a trademark which was registered / recognized outside India was subject to levy of service tax under IPR service. The Tribunal relied upon various decisions and held that the transfer of such trademark which has not been recognized or registered within India will not fall within the ambit of Intellectual Property Right Service. The transfer of goodwill will not fall within the definition of IPR service as stated in Section 65(55b) of Finance Act, 1994. Valuation and quantification of demand - The demand raised is based on the Transfer of Business Agreement (425.25 crores) from which the value for transfer of goodwill is derived by the department on the basis of trademark license agreement - Held that:- We fail to understand how the department can base this agreement to arrive at the value of goodwill when the fee for use of trademark agreed between parties to be 8.5% of annual domestic sale made by Mobis India Ltd. There is no domestic sale of good will annually - such a valuation derived by the department for the goodwill is also without any logic or basis. Demand do not sustain - appeal allowed - decided in favor of appellant.
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