MITSUBA SICAL LTD. Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, we note that the revisional authority has demanded service tax of Rs. 9,63,006/ - from the appellants on royalty amount of Rs. 76,85,304/ - paid by them to their technical collaborators for the period 1999 -2001.

(2.) The authority has also demanded interest on the tax amount and has also imposed penalties on the party. The above demand of service tax is in the category of 'Consulting Engineer's Service'. The case of the appellants is that what was paid by them to their technical collaborators was royalty as percentages of ex -factory sale price of their finished goods in India and that service tax on such amount was not leviable prior to 10 -9 -2004, the date on which transfer of intellectual property right was introduced as a new taxable service.

(3.) THE learned Counsel and the learned SDR have stated the respective cases or the assessee and the Revenue. The learned Counsel has cited a plethora of decisions of the Tribunal holding that transfer of technical know -how was not to be taxed as 'consulting engineer's service' for periods prior to 10 -9 -2004. No binding contra decision has been cited before us.