2013 (11) TMI 555

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..... their Indian counterpart to manufacture diesel engines and various components thereof as per the specification/designs developed by them. For the services rendered, Indian entity was liable to pay annual technical support fee by way of royalty. The department was of the view that the said services merit classification under Consulting Engineers' Service and accordingly, demanded Service Tax of Rs. 73,06,346/- along with interest thereon for the period 1997-98 to 2000-01 from the foreign service provider vide notice dated 6.6.2002. The notice was adjudicated and the demand was confirmed along with interest and by imposing penalties. On appeal, the lower appellate authority set aside the order of the original adjudicating authority and allow .....

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..... ice recipient and the agreement also envisaged payment of fees for the technical assistance so rendered, the services relating to rendering of technical assistance would come under the Consulting Engineers Service and would be chargeable of Service tax accordingly. It is the contention of the Revenue that the ratio of this decision would apply to the facts of the present case also and, therefore, the respondents are liable to pay Service Tax on the technical assistance received in India at the site of the recipient of the service. Since the impugned order does not take into account these facts, the same need to be set aside and Revenue's appeals allowed. 5. Learned Counsel for the respondents submits that the facts in the present appeals a .....

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..... hereof. The technical knowhow includes information regarding design data, manufacturing and quality control impressing processing, design and construction of plant facility, quality related problems of the licenced product and training to the personnel of the Indian entity. The agreement also envisages supply of updated data based on the current research and development and engineering done by the foreign service provider. It is seen that the activity undertaken would more appropriately fall under 'Intellectual Property Rights Service' and not under 'Consulting Engineers' Service' and, therefore, the demand of Service Tax under the category of Consulting Engineers' Service is not sustainable in law. The ratio of the decisions relied upon by .....

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