TMI Blog2012 (4) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... ns the need to enter into an agreement with the appellant and for payment of royalty to them. As such, we do not agree with the learned advocate that their permission to use the said trade mark to the oil companies is not covered by the definition of Intellectual Property right and intellectual property services as appearing in the Finance Act. While deciding against the assessee, demand beyond normal period of limitation set aside. - 597 of 2007 - ST/A/176/12-CUS - Dated:- 12-3-2012 - Archana Wadhwa, Rakesh Kumar, JJ. For Appellants: Shri S Ganesa, Sr.Adv. Shri P K Rana, Adv. For Respondent: Shri Sunil Kumar, SDR Per: Archana Wadhwa: Being aggrieved with the order passed by Commissioner of Service Tax New Delhi vide which he has confirmed the Service Tax of ₹ 87,70,372 and Education Cess of ₹ 1,75,407 against the appellant along with interest and imposition of penalties under Section 76, 77 and 78 of the Finance Act, the appellants have filed the present appeal. 2. As per facts on record, the appellant M/s. Hero Honda Motors Ltd. entered into an agreement with M/s. Bharat Petroleum Corpn. Ltd., M/s. TIDE Water Oil Co. Ltd. and M/s. Savit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appears on behalf of the Revenue. The appellants have also filed a written submissions after conclusion of hearing. 6. It stands mainly contended by the applicant as under: (i). The scope and ambit of the term Intellectual Property Right as defined by section 65 (55a) of the Finance Act has been clarified by the CBEC Circular No. 80/10/2004-S.T. dated 17.9.2004. Para 9 of this Circular makes it clear that Intellectual Property Right (IPR) within the meaning and for the purpose of section 65 (55)(a) are confined to those IPR governed by specific legislations in India. The said Circular further specifically states that IPRs like integrated circuits and undisclosed information which are not covered by any specific legislations in India would not be covered under taxable services. It is of vital importance to note that a person can certainly claim proprietary rights under common law in respect of such items like integrated circuits and undisclosed information, but as they are not covered by an Indian Legislation, the Circular clarifies that as these items are not covered by Indian law , therefore, they do not give rise to taxable services. The Circulars thus states clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said CBEC circular is binding on the Service Tax authorities and it is not permissible for them to raise any demand on the assessee contrary to such circular. Reference stands made to various decisions of the Hon'ble Supreme Court. (vii) In any case the issue involved is of interpretation of the statutory provisions of law and in the absence of any suppression or mis-statement on the part of the appellant longer period of limitation is not available to the Revenue. Reliance again stands made on various decisions of the Tribunal as also of the Hon'ble Supreme Court. 7. As against the above submissions, the learned DR draws our attention to the definition of Intellectual Property Right as appearing in Section 65 (55A) of the Finance Act, 1994 as also to the definition of taxable service as appearing in Section 65 (105) (zzr) of the Finance Act. He submits that name Hero Honda is admittedly registered trade mark of the appellant in respect of two wheeler vehicles. Registration of the same in the name of other person is protested and under Section 9 11 of the Trade Marks Act of 1999. Further, Section 28 of the said Act also confers right upon the holder of the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxable Service means any [service provided]*, - to any person, by the holder of intellectual property right in relation to intellectual property service . Note: [ ]* substituted by the words - substituted by the words -[service provided or to be provided ] - (w.e.f. 16.6.2005) by Section 88 of the Finance Act, 2005 (18 of 2005). 8.1 As is seen from the above, Intellectual Property Right means any right to intangible property, which includes trade marks, designs, patents or any other similar intangible property which includes trade marks, under any law for the time being in force. Permitting the use or enjoyment of the said trade mark belonging to a particular person amounts to Intellectual Property services, The appellants have not disputed the fact of having entered into agreement with M/s. Bharat Petroleum Corpn. Ltd., M/s. TIDE Water Oil Co. Ltd. and M/s. Savita Chemicals Ltd. for permitting them to use the trade mark Hero Honda as also Hero Honda 4T plus on the products being manufactured by them. It is also not in dispute that the said trade marks are duly registered in the name of the appellants and as such belonging to them. 9. The appellants main content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are getting royalty for use of the said trade mark by the oil companies. 13. We have also examined the various clauses of the agreement which stand reiterated in the impugned order of the Commissioner. The provisions of section 2(1)(zb) of the Trade Mark Act, 1999, define trade mark as a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colour. The trade mark 'Hero Honda' owned by the appellant definitely indicates the connection between the appellants and their representative to use the same. The Registrar of the Trade Marks Act, 1999 has been empowered to reject the request of any other person to register the said trade mark in their name. Admittedly the said trade names are not registered in the name of the Companies for lubricants or oils. The provisions of clause 29 of the Trade Mark Act, 1999 deals with infringement of registered trade mark. Sub-clause (1) states the general proposition of the law in this respect and lays down that when a registered trade mark is used by a person who is not entitled to use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered trade mark would constitute infringement. Advertising of a trade mark to take unfair advantage of, or against the honest commercial practices or which is detrimental to the distinctive character or which is against the reputation of the trade mark shall constitute an infringement. Sub-clause (9) stipulates that where the distinctive element of a registered trade mark consists of words, the spoken use of such words as well as visual representation for promoting the sale of goods or promotion of service would constitute infringement. 14. If the argument of the learned Advocate that 'Hero Honda' should be considered as trade mark of the oil companies is accepted, we really fail to understand as to whether there was any need for oil companies to enter into agreement with the appellant seeking their permission to allow use of their trade name. Admittedly, the goods manufactured by the oil companies are to be used in the vehicles manufactured by the appellant companies and have a strong connection with the same. The appearance of the trade mark Hero Honda and Hero Honda 4T plus on the oil company's products definitely indicates a connection between the said c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f longer period can be adopted by the Revenue only when there is suppression or mis-statement on the part of the assessee 'with an intent to evade payment of duty' Such intention should be manifested from the actions, behaviour of the appellant. The Hon'ble Supreme Court in the case of Padmini Products has held that there should be some positive act on the part of the assessee to suppress the information from the department or wilful mis-statement with intent to evade payment of duty. Admittedly, the use of such trade mark by the oil companies was being done in the open and it cannot be said that the Revenue was not aware of the use of the said brand name. We also find that the there is no positive act which stands attributed or alleged against the appellant so as to charge them with any intention of deliberately suppressing or concealing rendering of such services with an intention to evade payment of Service Tax. For applicability of proviso to Section 73 (1) of the Finance Act, mensrea is an essential element and is required to be established by the department, by tangible affirmative evidence. Mere failure on the part of the assessee, especially when the issue invol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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