TMI Blog2005 (4) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... usive 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 transfer of know-how. Article 7 relating to payment also mentions the consideration for the payment as Technical Information and Intellectual Property Rights and Trade- marks to be used in connection with products and parts . Thus, the consideration is not for any consultancy service rendered. It is for the transfer of intellectual property. The relationship between the parties is not one of consultant and client; but seller and buyer of assets. In Bajaj Auto Limited v. CCE, Aurangabad [ 2004 (10) TMI 11 - CESTAT (MUMBAI)] this Tribunal held that royalty for right to use trade mark is a transaction in property and no consultancy or advice is involved, and same is not liable to Service tax. To the same effect is the decision of this Tribunal in the case of Aviat Chemicals Pvt. Ltd. v. CCE (Service Tax), Mumbai [ 2004 (6) TMI 2 - CESTAT, NEW DELHI] . The decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er defined). Technical Information shall be limited to that Information and know-how owned or controlled by Yamaha as on the date of execution of this Agreement, which Yamaha has a right to license or disclose within the Territory as on the date of execution of this Agreement. (a) Master Parts Lists with respect to the Motorcycles; (b) Drawings with respect to Motorcycles and parts thereof; (c) Yamaha Design Standards (YGK) and Yamaha quality Standards ( YQS ), cited in the Drawings; (d) Revised information of the materials set forth in paragraphs (a) through (c) above. (e) Inspection Standard for completed products; and (f) Process Standards which specify and give technical explanation of the basic manufacturing methods and process required for the manufacture of Locally Manufactured Parts for Motorcycles. 1.10. Intellectual Property Rights shall mean any patents, utility models, designs and applications therefore relating to the Motorcycles or parts owned or controlled by Yamaha as on the date of execution of this Agreement . 1.11 Trademarks shall mean the trademarks listed in Exhibit D attracted hereto . Article 2 of the Agreement relating to grant of license reads as under :- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, 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 that definition of consulting makes it clear that a client and consultant relationship between the parties is the essence of the relationship in a consultancy while Technical Collaboration is a different (Partnership) relationship, altogether. He also pointed out that even if there is an element of advice involved in a Technical Collaboration Agreement, it is well settled, that an agreement is not to be cut into various parts and parts taxed. 6. It is the contention of the learned SDR that advise and technical assistance are at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes it to be a payment reserved by the grantor of a patent ...............and payable proportionately to the use made of the right by the grantee . It also refers to it as a payment made to an inventer in respect of each article sold under the patent . The Concise Oxford Dictionary defined it as a sum paid to the patentee for the use of a patent . 9. The Hon ble Supreme Court has noted as under in State of Orissa v. Titaghur Paper Mills Co. Ltd. - 1985 Supp. SCC 280 :- Royalty is not a term used in legal parlance for the price of goods sold. Royalty is defined in Jowitt s Dictionary of English Law, Fifty Edition, Volume 2 page 1595 as follows. Royalty, a payment reserved by the grantor of a patent, lease of a mine or similar right, and payable proportionately to the use made of the right 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. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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