TMI Blog2017 (4) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of licensed process technology or proprietary technical information. The essence of the agreement as could be seen from the narration above is for transfer of technology process. The Tribunal had occasioned to examine similar issues involving technical collaboration and transfer of intellectual property right from foreign companies to Indian recipient. It was held that when the agreement is for transfer of exclusive/non-exclusive technical know-how the consideration received cannot be taxed under consultancy service. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 58303 of 2013 - ST/A/52458/2017-CU[DB] - Dated:- 21-3-2017 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandran, Member (Technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious products was developed by the foreign companies and the same is supplied to the appellant in connection with putting up the refinery in India. Essentially, the agreement is for such transfer of technical knowhow. Any engineering service, technical assistance and guarantees provided by the suppliers of such technical knowhow cannot be brought under the tax category of consulting engineer service. A reference was made to the terms of contract entered into with various foreign companies; (ii) the foreign collaborators are not coming under the category of consulting engineer . These foreign companies are manufacturers of various final products. They have developed certain technical knowhow and process technology. The appellant is ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under engineering consultancy service. 4. We have heard both the sides and perused the appeal records. It is necessary to examine the terms of agreements entered into by the appellant with various foreign collaborators. The agreement dated 06/11/1997 is with Kinetic s Technology International BV, Netherland. It stipulates that M/s Kinetic (Licensor) has developed technology for the production of Hydrogen, who is also owner and controls process technology relating to a process for the production of Hydrogen. The appellant intended to install and operate under license from the licensor a hydrogen production unit to be installed in its refinery located in Madhya Pradesh. In this connection, the appellant wishes to receive certain basic engi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsor granted license on such processes, a non-exclusive, non-transferable patent rights. The U.S. company will also make available technical information for use in the operations of the licensed units. It also talks about use of proprietary information by the appellant. The payment is in the form of royalty. The terms of payments are stipulated in the agreement itself. 7. Agreement dated 31/07/2006 is between the appellant and M/s AB Lummus Global Inc., U.S.A. (licensor). The said agreement stipulates with the licensor has developed technical information and inventions relating to delayed coking process and has the right to grant a license to use such process for appellant s plant in Madhya Pradesh. The agreement also states that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for transfer of exclusive/non-exclusive technical knowhow the consideration received cannot be taxed under consultancy service. Reference can be made to the decisions in Yamaha Motors (I) Pvt. Ltd. vs. CCE, Delhi IV (Faridabad) reported in 2006 (3) S.T.R. 665 (Tri. Del.), CCE CUS, Nashik vs. Larsen Toubro Ltd. reported in 2015 (37) S.T.R. 156 (Tri. Mumbai), CST, Mumbai vs. Leibert Corporation reported in 2014 (33) S.T.R. 161 (Tri. Mumbai) and CST, Delhi vs. Suzuki Motor Corporation reported in 2012 (25) S.T.R. 266 (Tri. Del.). 9. Based on the above discussion and analysis, we find that the impugned order is not legally sustainable. We also note that the appellant made out a strong case against demand fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
