Full Judgment
2. The learned Counsel for the applicant would refer to the two agreements to state that these agreements are for licence to use know-how, patents, trade marks, and technical assistance. He argues that know-how is of the nature of property, and hence cannot be taxed as the Consulting Engineering Services. He also states that the technical assistance rendered in this case is only incidental for the purpose of transfer of know-how and hence it cannot be perceived as a service. He also states that there has been a gross arithmetical error in the calculation of the tax liability in the impugned order.
According to him, as the value in terms of services received in respect of technical assistance can not exceed Rs. 1.8 crores, approximately the tax liability on them can only be around Rs. 20 lacs, which amount could be, at the best, relevant with regard to pre-deposit for the purpose of hearing the appeal.
3. The learned authorized representative (DR) reiterates the reasoning of the Commissioner as the stand taken by the learned Counsel on the issue of arithmetical error has gone uncontested by the Revenue. It is noticed that the show cause notice dated 26.8.2004 has shows a figure of Rs. 1,70,69,55,549/- in respect of the period September 2002 to March 2003 which has been duly accepted by the Commissioner. However, as per the reply furnished by the appellant before the Commissioner, the figures furnished is only Rs. 503121631/-about which the impugned order is silent. According to the appellant, between 01.09.2002 and 31.03.2004, the total amount paid should work out to Rs. 1213623110/-.
One mistake breeds many mistakes. Because of this "discrepancy" the Commissioner has reached a figure of Rs. 2,41,74,57,028/- as correct gross value on the services received by the applicant. If the applicant's version which is not commented upon by the Commissioner is correct, the service tax liability if any, would work around Rs. 2,19,13,243/- and not Rs. 14,07,93,981/-.
4. Having considered the fact and circumstances, and noticing that the definition of know-how as appearing in technical assistance agreement dated 22.08.1995 includes a broad spectrum of processes bordering the realm of intellectual property, viz., knowledge, data, experience, skills, know-how, methods, inventions, patents, models, formulae, recipes and specifications of materials, technical information, procedures, techniques besides, of course services relating to such property, it is hereby directed that on the applicant's depositing a sum of Rs. 25 lacs (Rupees twenty five lacs only) within six weeks from today, there shall be a waiver of pre-deposit of the rest of the amount of tax and penalties raised under the impugned order. If the amount is not so deposited, the appeal shall stand dismissed. Post the matter for compliance on 22.06.2007.