DAURALA ORGANICS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal by the assessee arises from a judgment of the Customs, Excise & Service Tax Appellate Tribunal dated 24 January 2014. By the judgment which is impugned, the Tribunal has dismissed the appeal filed by the assessee against an order of the Commissioner, Central Excise, Meerut-I passed in exercise of the revisional powers conferred by section 84 of the Finance Act, 1994 imposing penalties on the assessee under sections 76, 77 and 78 of the Finance Act, 1994.

(2.) The assessee set up a plant for the manufacture of Parahydroxyphenylglycine (PHPG) and entered into a licensed agreement with Gerard Kessels Sociedad Anonima (KSA), a company incorporated under the laws of Spain on 17 May 2000. Under the agreement, KSA agreed to transfer technology to the assessee for use in connection with the production of PHPG at Daurala, District Meerut.

(3.) On 8 November 2004 followed by corrigendum dated 22 February 2006, a notice to show cause was issued to the assessee to explain why on the basis of the agreement between the assessee and KSA service tax should not be levied and recovered, treating the transfer of know how and technology as "scientific and technical consultancy service". On 28 December 2006 an order was passed by the Additional Commissioner (Adjudication), Central Excise, Meerut-I by which the proceedings were dropped. The adjudicating authority held that the transaction between the assessee and KSA was in the nature of sale or transfer of intangible property and did not constitute a 'scientific and technical consultancy service'.