COMMISSIONER OF CENTRAL EXCISE Vs. KIRLOSKAR BROTHERS LTD.

JUDGEMENT

(1.) THERE are two appeals filed by the Revenue against Order -in -Appeal No. PII/BKS/295/2005, dated 01/07/2005 & PII/BKS/303/2005, dated 16/07/2005 passed by Commissioner of Central Excise (Appeals), Pune -II. As the appellants are one of the same in both these appeals and the issue involved are more or less similar, they are taken up together for consideration and disposal.

(2.) THE Revenue has filed this appeal against the order passed by the lower appellate authority on the ground that the service received by the appellant from abroad is classifiable under "Consulting Engineers Service" and therefore, royalty paid by the respondent, M/s. Kirloskar Brother Ltd. is liable to service tax under the category of "Consulting Engineer's Service". Accordingly, a notice was issued proposing recovery of service tax of Rs. 33,94,806/ - for the period 2002 -03 along with interest thereon and also proposing to impose penalties. The adjudicating authority confirmed the demand along with interest and also imposed penalty under Sections 77 & 78 of the Finance Act, 1994. The respondent preferred an appeal before the lower appellate authority, who held the services received by the appellant is not liable to service tax under the category of "Consulting Engineers Service" based on the decisions of the Tribunal in the case of Bajaj Auto Ltd. v. CCE&C : [2007] 6 STT 322 (Mum. -CESTAT) and accordingly, set aside the demand. The revenue is aggrieved of the same and before us.

(3.) THE Ld. Advocate for the respondent submits that in the case of Mitsui & Co. Ltd. v. CCE & ST : [2013] 32 taxmann.com 31(Kol. -CESTAT) , this Tribunal has held that designs and drawings are goods assessable to Customs duty and therefore, the value of such designs and drawings cannot be subjected to service tax. Similarly, in the case of Solitz Corpn. v. CST : [2009] 18 STT 550 (New Delhi -CESTAT), the Tribunal held that designs and drawing sent as parcel or through courier has to be treated as goods and cannot be subjected to service tax. Again in the case of Kirloskar Electric Co. Ltd. v. CCE : [2007] 9 STT 128 (Bang. -CESTAT) , this Tribunal held that transfer of drawings/designs and other technical data cannot be covered under the definition of Consulting Engineer Service and hence, service tax demand is not sustainable