2005 (4) TMI 3

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..... ary and the Korean parent got into "Technology Licence" and "Trade Mark" Agreements. Based on the technology and trade marks so transferred the Indian company manufacture washing machine, colour television in India. The agreement was entered in September 1995 and commercial production started from 17-6-97. In terms of the agreements the Indian Co. made "know-how fee" and "royalty" payments from July, 1998 to June 2002. 3. The Central Excise authorities considered the agreements to be ones for 'engineering consultancy' and demanded service tax in regard to the payments made. The appellants contended that the transaction involved transfer of intellectual property like know-how, trade marks etc. and not rendering of engineering consul .....

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..... made by both sides. 5. The contention of the appellant-company is that no service tax was attracted as engineering consultancy in regard to technology and trade mark agreements. It is being pointed out that know-how patent, trade mark are intellectual property and trading in them is not rendering any service, but is transfer of property. It is also being contended that the issue raised in this appeal remains covered in favour of the appellants by the judgment of this Tribunal in the case of M/s. Bajaj Auto Limited v. CCE&C, Aurangabad - 2005 (179) E.L.T. 481 (T) = 2004 (65) RLT 857 and Navinon Ltd. v. CCE, Mumbai-VI - 2004 (172) E.L.T. 400. It is being pointed out that the very issues came up for consideration in Bajaj Auto Limited and the .....

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..... ated 9-3-98 and 7-11-2000) which deals with industrial property rights and brand names". "5. 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 payment for a service provided. It is understood as a share of product or profit reserved by owner for permitting another the use of his property. Royalty payments in the present case for the use of technology and know-how cannot be equated with any services to be provided by M/s. Ciba Geigy Ltd., to the appellants and therefore, the order of the lower authorities attracting a levy of tax on royalty payments made are required to be set aside. .....

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