Page 159 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] HINDUSTAN AERONAUTICS LTD. v. COMMISSIONER OF S.T., BANGALORE-I 77
at different places while it has been viewed as Consulting Engineer Services in
respect of the units in U.K. it was viewed as Scientific and Technical Consultancy
Services in respect of the unit at Nashik and in the instant appeal, the Depart-
ment seeks to categorize the services as Intellectual Property Rights Services.
Ongoing through the agreement and Board’s circular issued in this regard, it is
clear that there is a certain transfer of know-how involved it is not coming from
the records of the case that such technical know-how, design, copy right etc have
been patented in India in view of the clarification given by the Board unless such
technical know-how etc. are listed under the law for time being in force in the
country and the services cannot be held to be a taxable service. Also we find that
Tribunal Mumbai has gone into the issue of such contracts in an elaborate man-
ner and have observed as follows :
“4. Learned Chartered Accountant appearing on behalf of the appellant-
assessee takes us through the entire case records. It is his submission that
addendum issued by the Revenue is incorrect inasmuch as that the said ad-
dendum was issued after considering the written submissions made by the
appellant-assessee. It is his submission that Revenue is trying to improve
upon that case after considering the defence raised by the assessee. On mer-
its, it is his submission that the contract entered by the appellant-assessee is
on behalf of the Republic of India for the supply and transfer of licence for
production of fighter aircraft, engines, air borne equipments. The said
agreement was entered on 28 December, 2000 accordingly, appellant-
assessee paid the amounts to the foreign-based firm. He would take us
through the agreement which was produced for perusal of the bench and
submits that the findings do not indicate as to how the services can be con-
strued as scientific or technical consultancy services. Learned Counsel
would submit that there is no basis to hold that it would fall under the def-
inition of the services “scientific and technical consultancy service” as pro-
vided under Section 65(60) of the Finance Act, 1994. He would submit that
said definition would be applicable only in the case of consultation, advice
or technical assistance provided by the scientist or a technocrat or science or
technology institution. It is his submission that M/s. Rosobornexport is not
a science or technology institution. In support of such a submission he pro-
duces a copy of the registration of said supplier with the authorities which
indicates that M/s. Rosobornexport is registered as joint-stock company.
He would rely upon the ratio of the decision of the Tribunal in the case of
Kopran Ltd. - 2011 (23) S.T.R. 627 (Tri. - Mum.), for the proposition that an
amount paid for transfer of technical know-how for manufacture will not
be covered under scientific or technical consultancy services.”
5. In view of the above and in view of the facts and circumstances of
the case, we find that the services received by the appellants from Rolls Royce
Turbomeca Limited, U.K. are not in the nature of Intellectual Property Services as
defined under Finance Act, 1994. Therefore, we find no merit in the case of the
Department. Therefore, the appeal is allowed with consequential relief, if any, as
per law.
(Order was pronounced and dictated in Open Court on 27-2-2020)

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GST LAW TIMES  2nd July 2020  159