ST : Intellectual Property Services : Transfer of trade-mark 'Eicher' from Eicher to TAFE Motors under a contract liable to service tax
•When contract is read as a whole it is indeed a contract for transfer of right to use Trademark for limited purposes but on a permanent basis; the fact that certain post-transfer conditions are attached to transfer of right does not change nature of contract. • A person selling a particular product to a dealer may impose post-sale conditions like he should not re-sell goods in loose forms, dealer should sell product only from a premises displaying name of manufacturer, dealer should not re-sell goods in other than specified territories or that he should not resell goods or to effect that goods sold should be used only for a specified purpose only does not alter nature of transaction as a sale; so transaction would not be covered by sub-clause (a) of section 65(55b) of Finance Act, 1994; but transaction would be covered by sub-clause (b) of section 65(55b); so transaction amounts to Intellectual Property Service - [2012] 18 taxmann.com 69 (New Delhi - CESTAT)
•When contract is read as a whole it is indeed a contract for transfer of right to use Trademark for limited purposes but on a permanent basis; the fact that certain post-transfer conditions are attached to transfer of right does not change nature of contract. • A person selling a particular product to a dealer may impose post-sale conditions like he should not re-sell goods in loose forms, dealer should sell product only from a premises displaying name of manufacturer, dealer should not re-sell goods in other than specified territories or that he should not resell goods or to effect that goods sold should be used only for a specified purpose only does not alter nature of transaction as a sale; so transaction would not be covered by sub-clause (a) of section 65(55b) of Finance Act, 1994; but transaction would be covered by sub-clause (b) of section 65(55b); so transaction amounts to Intellectual Property Service - [2012] 18 taxmann.com 69 (New Delhi - CESTAT)
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