TMI Blog2009 (4) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with interest and penalty set aside. - ST/271/2008 - 120/2009-ST - Dated:- 1-4-2009 - Shri M. Veeraiyan, Member (Technical) and Shri P.K. Das, Member (Judicial) (Final Order No. 120/2009-ST dt. 1.4.2009 certified on 17.4.2009 in Appeal No. ST/271/2008) S/Shri J. Vellapally, Sr. Adv. Rajesh Chibber, Adv. for Appellant Shri R.K. Verma, DR for Respondent Per M. Veeraiyan: The appellant filed this appeal against the order of the Commissioner No. 05/Commr/Mrt-1/2008 dated 13.2.2008. 2. Heard both sides. 3. The relevant facts are that the appellant is engaged in the manufacture of medicines; that they entered into collaboration agreement dated 19.11.90 with M/s. Mundipharma A.G. Switzerland; that they r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts manufactured using the said formula. They were not receiving any services over the period and consequently no services were received during the period of demand. The entire payment made and are likely to be made in future relates to only services already received before introduction of service tax in 1994 on any of the services and consequently before introduction of tax on IPR service w.e.f. 10.9.2004. 4.2 He also submits that the secret formula known to Mundi-pharma A.G. Switzerland cannot be treated as a property to be governed by Intellectual Property Laws. They are not property as Mundi-pharma A.G. does not get right in respect of the said knowledge. The appellant was permitted to use the secret information in pursuance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. As noted above, know-how as an intellectual property is sometimes also referred to a trade secret which enables its user to derive commercial benefit from it. A trade secret is a formula, practice, process, design, instrument, pattern or compilation of information used by a business to obtain an advantage over competitors within the same industry or profession. Such trade secrets are sometimes referred to as confidential information . A person having know-how as a trade secret would protect such confidential information by non-compete or non-disclosure contracts. Unlike patent or trade mark, the attribute of protection of confidential information in the know-how gives perpetual monopoly in such secret information which does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances, to maintain its secrecy. 5.2 He also submits that when a foreign company render services, the recipient is liable to pay service tax from 1.1.2005 as held by the Larger Bench of the Tribunal in the case of Hindustan Zinc Ltd. Vs. CCE, Jaipur, reported in 2008 (87) RLT 317 (CESTAT-LB)=2008 (11) SIR 338 (LB-CESTAT). 6. We have carefully considered the submissions from both sides. We also perused the agreement and the show cause notice. In the show cause notice it is alleged that the appellant was granted exclusive right to manufacture, use and sell within the territory, the preparation utilizing the know how and scientific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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