COMMISSIONER OF SERVICE TAX Vs. BHARAT ELECTRONICS LIMITED

JUDGEMENT

(1.) This appeal is by the revenue challenging the order passed by the Tribunal which held that service tax is not leviable on transfer of technology, relying on various judgments cited.

(2.) The assessee entered into a collaboration agreement with five foreign parties for transfer of technology and technical assistance for manufacture of products in India including technical expertise, training of personnel designs, software, test specifications and quality manuals. The assessee was issued with a show-cause notice for having contravened the provisions of Finance Act, 1994 calling upon them to show cause as to why a sum of Rs. 31,96,691 should not be demanded as per Section 68 of the Finance Act, 1994 read with Rule 6(1) of Service Tax Rules, 1994 and secondly, why penalty should not be imposed. The assessee submitted his explanation. However, the Deputy Commissioner, Central Excise, Sales Tax Division, confirmed the proposals by its order dated 31-3-2003. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner (Appeals), who dismissed the appeal and affirmed the order of the Deputy Commissioner. Aggrieved by the same, the assessee preferred an appeal to the Tribunal. The Tribunal relying on various decided cases held that the assessee was not liable to pay any service tax received by him from entities which, are outside the country. Therefore, it set aside the order of the authorities and held that the assessee is not liable to pay service tax.

(3.) In fact, the Tribunal clubbed other two appeals and passed a common order. The other two assessees namely M/s. SKF India Limited and M/s. Araco Corporation were respondents in two appeals preferred by the revenue, against the very same order, in which, this Court up held order of the Tribunal and dismissed the appeals.