TMI Blog2019 (2) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, in disciplines of science or technology. It can be concluded that the assistance given by M/s. Europlex to the appellant for its research and development activity is nothing but technical assistance for improvement of its projects / products - In the present case, there is no transfer of technical know-how. It is only a technical assistance for research and development activities, which would definitely fall under scientific or technical consultancy service - demand do not sustain. Time Limitation - Held that:- The show cause notice for the period October 2007 to April 2008 has been issued on 24.4.2010. Being a revenue neutral situation, as per the decisions of the Tribunal, the demand raised invoking extended period is not sustainable. The appellants had disclosed the amounts in the accounts and financial statement. The issue whether the transaction would fall under Scientific or Technical Consultancy service is interpretational too - apart from a bald allegation that appellant suppressed facts there is no positive act on the part of appellant brought out in show cause notice or impugned order as to suppression - appeal succeeds on limitation coupled with revenue neutrality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any proprietary right over such copyright. As per clause 4 of the master agreement, M/s. Europlex would charge the appellant for the expenses incurred by it and the appellant has the right to inspect and audit the accounts of M/s. Europlex. Thus, what was paid by the appellant was only reimbursement of the fixed cost incurred by M/s. Europlex on wages and salaries, rent and cleaning charges, repair and maintenance charges travel etc. That being reimbursable expenses, the appellant is not liable to pay service tax as per the decision of the Hon ble Supreme Court in the case of Union of India Vs. Intercontinental Consultants Technocrats Pvt. Ltd. 2018 (10) GSTL 401 (SC). 2.1 The ld. counsel adverted to the definition of Scientific or Technical Consultancy under section 65(92) and also to the taxable service under section 65(105)(za) of the Finance Act,1994. In the instant case, there is no scientific advice or consultancy or any expert opinion given by M/s. Europlex to the appellant. What is transferred in consultation is technical show-how and not technical know-how. There being no consultation or advice rendered by M/s. Europlex to appellant, the services if any would not fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... organization. They have rendered assistance for research and development and therefore the services are in the nature provided in the definition of scientific or technical consultancy service. Merely because the intellectual property rights are retained by the appellant, the transaction would not fall outside the purview of scientific or technical consultancy service. Under section 66A, the appellants are liable to pay service tax on the amount paid to M/s. Europlex and therefore the demand confirmed is legal and proper. 4. Heard both sides. 5.1 For better appreciation, the definition of Scientific and Technical Consultancy service defined under section 65(92) is reproduced under:- Scientific or technical consultancy means any advice, consultancy or scientific or technical assistance, rendered in any manner, either directly or indirectly, by a scientist or technocrat or any science or technology institution or organization to a client, in one or more disciplines of science or technology The taxable service providing for levy of service tax on Scientific and Technical Consultancy Services as provided under section 65(105)(za) of the Finance Act, 1994 is as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and host a separate technology assistance and services for projects / products, which are closely related to a product / project within SBTPL or within an AFFILIATES s activities. SBTPL or the AFFILIATE requesting the deliverable will be responsible for funding the product / project. xxx xxx xxx xxx xxx xxx RIGHTS IN INFORMATION AND SOFTWARE If SBTPL is not a party to the PROJECT AGREEMEN, the respective AFFILIATE which is a party to the PROJECT AGREEMENT, shall, whenever created, exclusively own all right, title and interests in and to the DEVELOPMENT RESULTS regardless of the stage of development reached with (or the respective AFFILIATE) right to use and exploit them in any desired way including the right to copyright and patent. For the purposes of this AGREEMENT or any project agreements pursuant to this AGREEMENT, the words and expressions hereinafter defined in this clause shall have the respective meanings assigned to them: DEVELOPMENT RESULTS shall mean INTELLECTUAL PROPERTY RIGHTS and KNOW-HOW. xxx xxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght results out of the said R D activity, the same shall belong to the appellant and that M/s. Europlex shall not have any rights whatsoever on such patent or copyrights. The appellants have argued that since the copyrights / intellectual property rights are retained by the appellant, it is actually transfer of technical show-how and therefore there is no advice or consultation or assistance in scientific or technical matter. We fail to agree with this argument. Undisputedly, M/s. Europlex is engaged in design, development and manufacture embedded control and communication products and software. They have taken up the responsibility of putting up a separate department for research and development of the projects and products of appellant and therefore it can be strongly inferred that they have the capacity for such research and development activities. The amount paid by the appellant to M/s. Europlex is also for the services of such assistance rendered in R D activity. The definition of taxable service included not only advice, consultancy but also technical assistance rendered in any manner, either directly or indirectly, in disciplines of science or technology. It can be conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake credit, there can be no intention to evade payment of tax. The show cause notice for the period October 2007 to April 2008 has been issued on 24.4.2010. Being a revenue neutral situation, as per the decisions of the Tribunal, the demand raised invoking extended period is not sustainable. The appellants had disclosed the amounts in the accounts and financial statement. The issue whether the transaction would fall under Scientific or Technical Consultancy service is interpretational too. Further, apart from a bald allegation that appellant suppressed facts there is no positive act on the part of appellant brought out in show cause notice or impugned order as to suppression. For these reasons, we hold that appeal succeeds on limitation coupled with revenue neutrality. 6. The appellants have filed a miscellaneous application seeking change of cause title from M/s. Siemens Building Technology P. Ltd. to M/s. Siemens Ltd. The same is allowed in view of the approval given by the Hon ble High Court of Madras for amalgamation vide order dated 3.9.2010 in Company Petition Nos. 60 and 61/2010. 7. For the reasons discussed above, we are of the considered opinion that the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
