TMI Blog2017 (11) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively. Any share of the profit if distributed has to go to each of the partner in the ratio of their shares. In the instant case, Vemmar SRL, Italy is receiving the said amount. Thus, the payment made to Vemmar SRL, Itay cannot be considered as share of its profit of the joint venture. Thus, the facts are different in the instant case and therefore, the decision of the Tribunal in the case of Mormugoa Port Trust (supra) cannot be applied to the instant case. The legal provisions defining the nature and scope of taxable service, namely intellectual Property Right & Intellectual Property Service are defined under clauses (55a) and (55b) of Section 65 of Chapter V of the Finance Act, 1994. The Intellectual Property Right means any right to intangible property namely, trademarks, designs, patents or any other similar intangible property, under any law for the time being in force, but does not include copyright. In the present case I find that the services received by the noticee includes Product &Process Technology required for manufacture of helmets. The JVA allows transfer of services on temporary basis and those services appears to be provided by a person who has establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant by the Central Excise Officers for failure to pay service tax on the provision of technical know-how under the category of Intellectual property rights service . It was alleged that the appellant had paid US $ 1,00,000 to M/s.Vemmar SRL, Italy, and the same was liable to service tax as per Section 66-A of the Finance Act, 1994. Consequently, a demand of service tax was raised. The appellant paid the said amount along with interest also and obtained registration under service tax. It has been argued in the said appeal that since M/s.Vemmar SRL, Italy has subscribed to the share capital of the appellant company it cannot be said that the relations between M/s.Vemmar SRL, Italy and the appellant company is of service provider and service recipient. The demands were confirmed by the lower authorities. The appellant has argued that the Commissioner (Appeals) has not properly appreciated the contents of the Article IX of the joint venture agreement dated 29/07/2006. It was pointed out that the said article clearly mentions that the said information acquired by the appellant under agreement would be utilized forever without any other payment to Vemmar SRL, Italy except that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have relied on the decision of the Tribunal in the case of Mormugoa Port Trust (supra) to assert that any payment made by a joint venture to participating company cannot be treated as consideration for the service. It is seen that the said decision was passed wherein the appellants had clearly claimed that the royalty earned was not a consideration towards renting of immovable property but it was the share of Revenue from services which were jointly rendered by the assesee and the joint venture. Para 3 of the said decision reproduced below says a specific assertion to that effect: 3. The Assessee replied to the Notice submitting that there was no liability to service tax inasmuch as there was no renting of immoveable property services rendered by it and that the royalty earned by it was infact its share of revenue from services which were jointly rendered by the Assessee and SWPL. It was submitted that the principal-client relationship which is the basic tenet for applicability of service tax was not existing between the Assessee and SWPL. Besides resisting the demand on merits, it was also submitted that the entire demand was barred by limitation as the revenue was in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent the appellant are entitled to use, transfer, sell or otherwise disseminate the said information/technology/property to anyone and in any market or geographical location at their own will and convenience. (b) On study of the joint venture agreement, I find that Article XXIV - Confidentiality of the agreement clearly provides that The parties shall cause an appropriate confidentiality agreement to be entered into with the JVC which would ensure that all such Confidential information shall be treated by the JVC as confidential and shall not be disclosed to any one. Hence it is seen that the vendors have not relinquished their whole right in favour of appellant. Nowhere does the agreement allow the appellant to use the transferred property as their own with freedom to do whatever they desire. In fact even use for own purpose by the appellant is strictly restricted in terms of existing range of products, in terms of its presence in specific catalogues of M/s.Vemmar SRL, Italy, market/territory and usage for certain of new products. For different situations, different terms and conditions have been laid down at para 9.1 to para 9.4 of the said Article IX of the JVA dt. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... listing, though not exhaustive, is wide enough to include patents, ., trademarks and designs as appearing in para 9.1 of letter F.No.82/8/2004-TRU dated 10/09/2004 and any right to intangible property, namely, trademarks, designs, patents or any other similar intangible property, under any law for the time being in force.As mentioned in Section 65 (55a) of the Finance Act, 1994. The appellants appear to have seized upon the use of words or undisclosed information as mentioned in para 9.1 of letter F.No.82/8/2004-TRU dated 10/09/2004 and they have tried to equate their acquisition of intellectual property rights with only undisclosed information by deliberately disregarding the specific wordings of relevant extract of Article 9 of the JVA Section 65 (55a) of the Finance Act, 1994 and para 9.1 of letter F.No.82/8/2004-TRU dated 10/09/2004. I agree with the summarization of findings as at para 11.8 of the impugned OIO and find them to be well substantiated: I find that the legal provisions defining the nature and scope of taxable service, namely intellectual Property Right Intellectual Property Service are defined under clauses (55a) and (55b) of Section 65 of Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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