KOPRAN LTD. Vs. COMMISSIONER OF C. EX., RAIGAD

JUDGEMENT

(1.) IN adjudication of a show -cause notice dated 18 -10 -2006 issued to the appellant, the Commissioner confirmed demand of service tax of Rs. 507.95 lakhs against them under Section 73(1) of the Finance Act, 1994, demanded interest thereon under Section 75 of the Act and imposed penalties on the appellant under Sections 76 to 78 of the Act.

(2.) The demand of service tax is partly under the head "scientific or technical consultancy" in terms of Section 65(92) read with Section 65(105)(za) of the Act and partly under the head "market research agency" in terms of Section 65(69) read with Section 65(105)(y) of the Act. The entire demand is on various fees received by the appellant from M/s. Cadila Healthcare Ltd. (Cadila, for short) as consideration for various benefits granted to the latter under various agreements. The particulars of the agreements entered into between the appellant and Cadila are as follows : - <FRM>JUDGEMENT_145_LAWS(CE)3_2011.htm</FRM>

(6.) THE rights permanently transferred by the appellant to Cadila under the first three agreements dated 18 -9 -2001 were only intellectual property rights. Intellectual property service was not a taxable service during the period of dispute. Moreover, the service provided by the appellant to Cadila did not meet the requirements of "scientific or technical consultancy" defined under Section 65(92) of the Finance Act, 1994. Therefore, we hold that the demand of service tax raised on the appellant under the head "scientific or technical consultancy" is not sustainable. Other issues like limitation, therefore, do not fall for consideration in relation to such demand of tax.