CCE Vs. PANASONIC BATTERY INDIA CO. LTD.

JUDGEMENT

(1.) THE point of dispute in this appeal of the Revenue is as to whether during 2001 -02 to 2004 -05 period, the Respondent, who in terms of an agreement for know how transfer and technical collaboration with M/s Matsushita Electric Industries Co. Ltd., Japan (M/s MEI), had paid royalty charges to MEI, had received Engineering Consultancy service from MEI and whether as recipient of a taxable service from an offshore service provider, they are liable to pay service tax amounting to Rs. 34,12,845/ - on the royalty charges.

(2.) Heard both the sides.

(3.) WE have given careful consideration to the submissions from both the sides. From the agreement of the Respondent with MEI, Japan, it is clear that this is not an agreement for engineering consultancy, but an agreement for giving right to the Respondents to use certain technology, developed and patented by MEI, for manufacture of Dry battery cells in India, for which the Respondents have to pay royalty at an agreed rate to MEI. In a series of the judgments of the Tribunal - Amco Batteries Ltd. v. CCE 2006 (1) STR -217; CCE v. Valeo Friction Material India (P) Ltd. 2006 (3) STR 588 (T); Bajaj Auto Ltd. v. CCE 2006 (3) STR 411 (T); Navinon Ltd. v. CCE 2006 (3) STR 397 (Tri.); Turbo Energy Ltd. v. CCE 2006 (3) STR 678 (T) and CST, Ahmedabad v. Trumac Engg. Co. Pvt. Ltd. 2008 (10) S.T.R. 148 (Tri. - Ahmd.), it has been held that know how fee or royalty paid to a company for right to use the technology developed by that company, is merely a transaction in intellectual property, not a consultancy or advice and therefore service tax under "consulting engineer's service" head would not be attracted. In view of this, we hold that the no consulting engineer's service has been received by the Respondents and there is no infirmity in the impugned order. The Revenue's appeal is, therefore, dismissed.