Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 167 - CESTAT AHMEDABADLevy of Service Tax - Intellectual Property Service - import of the Technical know how, lump sum fees and Royalty paid to the foreign service provider - reverse charge mechanism in terms of Section 66A of the Finance Act, 1944 - HELD THAT:- There is no dispute on the facts that the amount of Rs 3,55,96,434/- paid by the appellant to M/s Benasedo Spa, Italy for Transfer of Technical know how and Royalty as per their Agreement dated 31-03-2010 has been treated as “Taxable Value” under “Intellectual Property Service” by Revenue, attracting total Service Tax of Rs. 21,96,432/- which is in dispute in this case - From the provisions regarding levy of service tax on IPR it is mandatory that the Intellectual Property Right is registered or governed by law in India. In the fact of the present case the service provider being not located in India, it’s Intellectual Property Right is not registered under any law in India, therefore for this reason itself the service received by the appellant is clearly not taxable under the reverse charge mechanism in the hands of the appellant. The Fees and Royalty paid by the appellant is towards Intellectual Property Right which is owned by company of Italy and the same is not registered under any law in India in terms of the definition of Intellectual Property Right is given in Section 65(55a) of Finance Act 1994. As per the facts of the present case, since the Intellectual Property Right which is used by the appellant belongs to the overseas supplier and that Intellectual Property Right is not governed by any law in India, therefore levy is not covered under the definition of Intellectual Property Right. Accordingly, the same is not taxable. The amounts debited from Cenvat Credit Account can not be retained by the Government without any authority of law and the same deserves to be returned to the Appellant in accordance with the law. Since the matter decided on its merits, the other issues raised by the counsel regarding the revenue neutrality and time limitations for SCN etc against such demand of Service Tax, are not dealt in this case. The impugned order confirming demand of Service Tax with interest and Penalty is not sustainable against the Appellant. As a result the impugned order is set aside - Appeal allowed.
|