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Dabur Research Foundation Versus Commissioner of Central Excise And Service Tax, Ghaziabad

Waiver of pre-deposit - Intellectual Property Right Services - Held that:- Applicant has transferred their ownership right and knowhow to their clients and by receiving the consideration from their client. The clients have become absolutely owner of these rights. In these circumstances, we are convinced that the argument advanced by ld. Counsel for the applicant that it is a transaction of sale of goods i.e tangible goods. Therefore applicant is not liable to be taxed under Intellectual Property .....

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Singh, Member(T),JJ. For the Petitioner : Shri Manish Gaur, Adv. For the Respondent : Shri Amresh Jain, DR ORDER Per: Ashok Jindal: The applicant is seeking waiver of pre-deposit of the impugned demand confirmed against them under the category of Intellectual Property Right Services. The facts of the case are that the applicant entered into two agreements: (a) Alembic Ltd. (b) Dabur Pharma Ltd. For the sake of convenience, the terms of agreements are reproduced below : (a) In the case of M/s Ale .....

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hich DRF has agreed: 3. The parties hereto are desirous of reducing into writing the terms and conditions on which the DRF will transfer and Alembic will acquire the Know How. Further the contentions are:- 1. DRF shall transfer and Alembic shall acquire the entire know how in respect of the products listed in Annexure-I hereto ('the said products'). "Know-How" for the purpose of this Agreement shall mean and include with regard to the products listed in the Annexure I hereto th .....

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echniques, information, methods, controls, data likely to assist in the manufacture of the said products including the improvements therein. 2. The all inclusive lump sum consideration for the transfer of the Know How shall be a sum of ₹ 16,00,00,000/- (Rupees Sixteen crores) only to be paid in one or more instalments as may be mutually decided by and between the parties hereto. The said consideration shall be inclusive of all applicable taxes and such amounts shall be borne and paid entir .....

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be entitled to use, sell, transfer, assign, license, contract, develop, modify or otherwise turn to account the Know How in any manner as may be considered appropriate by Alembic and without any objection or interruption by DRF or any person claiming through them. In the case of Dabur Pharma Ltd., the terms are as under: 2.2 Whereas the Assignor represents that it is the owner of the entire right, title and interest in and to: 2.2.1 certain patents and patent applications, particulars whereof a .....

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and diaries, promotional materials, project development records, or any other manner of records including electronic records (hereinafter the "Know-How"). Said Schedule I Intellectual Property and Know-How is hereinafter collectively referred to as the "Scheduled Intellectual Property". 2.3 Whereas the Parties have agreed that the Assignor shall assign to the Assignee its entire right, title and interest in the Scheduled Intellectual Property' 3.1 Pursuant to this Agreem .....

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wise in respect of any and all infringements of any patents, or any patents granted in respect of any pending patent applications, or for recovery of damages or otherwise in respect any rights arising from statute, contract, common law, equity, or otherwise in respect of the Know-How, regardless of whether said damages arose or infringement occurred prior to the Effective Date set out in clause 3.2 hereunder. 3.2 Notwithstanding anything contained in this Agreement, the sale, transfer and assign .....

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under the Intellectual Property Right. In these set of circumstances, the show cause notice was issued to the applicant, the same was adjudicated and demand of service tax, interest were confirmed and penalty was also imposed by Finance Act 1994. The applicant has challenged the said order before this Tribunal and seeking waiver of pre-deposit of the demand confirmed in the impugned order at this stage. 3. The ld. Counsel for the applicant drew our attention to the various clauses and submitted .....

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le for demand of service tax. To support his contention he relied on the decision and sought waiver of pre-deposit. 4. On the other hand, ld. AR opposed the contention of the ld. Counsel and submits that the agreement does not describe that it is a sale of goods in fact these intellectual property right are not goods. He further submits that the applicant has transferred their right although permanently but for use by their client. Therefore, they are covered under the definition of Intellectual .....

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