9911796707
TMI Blog2005 (4) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... recital mentions what the Indian company wanted to acquire :- "WHEREAS, Yamaha owns technical information relating to the manufacture and assembly of certain motorcycles parts and components thereof and certain trademarks and other intellectual property rights such as patents, design patents and utility models relating to motorcycles, parts and components thereof, all of which are part of the goodwill of Yamaha in the production and worldwide sale of motorcycles, parts and components thereof." The technical Information, Intellectual Property Rights, and Trade Mark sought to be transferred under the agreement find mention in paras 1.9, 1.10 and 1.11 of the agreement as under :- "1.9 "Technical Information" shall mean only the technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exclusive, non-transferable and indivisible license, without any right to sub-license to any person, to use Technical Information for the purpose of doing the following within the Territory during the term of this Agreement. (a) To manufacture or process locally Manufactured Parts at the Factory; (b) To have Locally Manufactured Parts manufactured or processed in the Territory by sub-contractors approved by Yamaha in accordance with Articles 3, 10.5, 12.4 and 13 hereof; (c) To procure Locally Procured Parts and to Import other Imported Parts approved by Yamaha in accordance with Articles 10 and 13 hereof; (d) To assemble Products from Parts of the Factory; (e) To sell, distribute or transfer Products and Parts in the Terri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o noted that since the agreement provided for Technical know-how, Technical Information, Personnel instructions and Training, the contract involved service of a Consulting Engineer. 4. We have perused records and heard learned Senior Counsel Shri Joseph Vellapally for the appellant and the learned SDR for the Revenue. 5. Learned Senior Counsel has taken us through the various provisions in the Technical Collaboration Agreement between the parties and has pointed out that the terms would clearly show that what is involved is a mere transfer of assets and no consulting is involved. He also pointed out that the Japanese company was not rendering service as a Consulting Engineer. It was merely passing on existing assets. It is his contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign, patent and utility models relating to motorcycle and parts and that the Indian company is desirous of acquiring such knowledge, patent, design, trade mark owned by that Japanese company. Clauses 9, 10 and 11 also clearly show that the Agreement was for licensing the transfer of intellectual property rights. Article 2 relating to grant of license makes it clear that what is being done is the grant of an exclusive non-transferable and indivisible license. The teaching service part covered by Article 5 speaks of personnel instructions and training carried out by the personnel of the foreign collaborator "in order to make them understand or become familiar with the technical information". Thus, the teaching element also forms part of trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght by the grantee. It is usually a payment of money, but may be a payment in kind, that is, of part of the produce of the exercise of the right. Royalty also means a payment which is made to an author or composer by a publisher in respect of each copy of his work which is sold, or to an inventor in respect of each article sold under the payment". In Navinon Ltd. v. CCE, Mumbai-VI - 2004 (172) E.L.T. 400 this Tribunal held that royalty payment does not attract Service tax as consulting engineer with the following observation : - "The amounts, which the appellants have to remit to M/s. Ciba Geigy Ltd., Switzerland, are mentioned in the agreement under the heading "Royalty". Payments of royalty in the common parlance are not insisted as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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