JCB INDIA LTD. Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) IN this appeal, preferred against the order of the Commissioner ordering recovery of Rs. 73,47,984/ - as service tax after adjusting exempted amount of Rs. 1,22,46,640/ - due to payment of R&D Cess, in view of the exemption Notification made on 16 -12 -02 issued under Section 93(1) of the Finance Act, 1994, ordering payment of interest on the said amount, imposing penalty of Rs. 500/ -under Section 75A of the Act, and penalty of Rs. 100/ - for every day under Section 76 of the Act not exceeding the amount of service tax amount payable, imposing penalty of Rs. 1,000/ - under Section 77 and imposing penalty of Rs. 73,47,984/ - under Section 78 of the Act, the appellant seeks interim stay of the impugned order.

(2.) THE learned authorised representative for the appellant contended that what was agreed to between the parties was not rendering of any service but it was transfer of technical know -how. The learned authorised representative placed reliance on the decision of this Tribunal in Commissioner of Central Excise, Indore v. Pinnacle Industries Ltd. reported in 2006 (1) S.T.R. 258: 2006 (3) STT 324, more Particularly on Paragraph 4 of the judgment in which it was observed that, what was charged by the foreign company was actually a technical know -how fee. It was submitted that even in the case of CCE, Indore v. J.K. Industries Ltd. reported in 2006 (2) S.T.R. 116 (Tribunal): 2006 (131) ECR 322, the Tribunal, in Paragraph 9 of the judgment, upheld the decision of Commissioner (Appeals) that the demand of service tax in respect of royalty payment could not be sustained. It was observed that the details gathered from the respondents were only in respect of technical know -how/royalty, and incidentally, no demand was pegged on any other activity including rendering of any service, that could be incised and quantified from the total sum thereof.

(3.) THE learned authorised representative for the department, supported the reasoning and findings of Commissioner for contending that no case was made out for waiver of pre -deposit of service tax and penalties payable under the impugned order. He took us through the agreement to submit that technical assistance was rendered and that the services were of the nature, which would be covered by the definition of consulting engineer.