Case Law Details
LifeCell International Private Limited Vs Commissioner of Central Excise and Service Tax (CESTAT Chennai)
The dispute in the present case is relating to the liability of the appellant under IPR service on Reverse Charge Mechanism (RCM). Similar disputes have been repeatedly brought before the Tribunal for a decision. It has been held that to be held liable for service tax on reverse charge basis under IPR service, such IPR should be recognized by any law for the time being in force in India. In the present case, the IPR is not registered for enforcement under any law including Trade Mark Act in India. This is an admitted fact. IPR now under consideration can be construed to be recognized by the Indian Law, if he satisfies the requirement of IPR as per law. Registration is not a requirement. We note that the Board has also clarified these aspects more specifically, with reference to the phrase “law for the time being in force.” It is clarified in the Circular dated B2/8/2004-TRU dated 10.09.2004, that the said phrase implies such laws as are applicable in India. IPRs covered under Indian Law in force at present alone are chargeable to service tax. Viewed from such clarification and also consistent view by the Tribunal in various decisions, it is clear that in the present case, the appellant cannot be held liable for service tax under IPR service.
CESTAT Benches have consistently held that the payment of royalty for IPR services was not liable to tax in India. Following the above ratio decidendi, therefore, we are of the view that the demands raised are not proper, for which reason the impugned orders are set aside.
FULL TEXT OF THE CESTAT CHENNAI ORDER
Brief undisputed facts, as could be gathered from the orders of lower authorities, are that the appellant is engaged in the process of separation, isolation, storage and cryo-preservation of Umbilical Cord and Stem Cells, for which, it appears that the appellant had entered into agreement with M/s. Cryo-Cell International Inc., USA (hereinafter referred to as ‘CCI’) under ‘Licence and Royalty Agreement’ dated 14.07.2004 for the use of ‘Licensed Technology’ and it is the duty of the appellant to pay the royalty, as per the terms of the above agreement, to M/s. CCI.
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