N. Kumar, J.—The revenue has preferred this appeal challenging the order passed by the Tribunal [2007 (8) S.T.R. 33 (Tribunal)] which has held that the assessee is not liable to pay Service tax. The assessee M/s. Siemens Vdo Automotive Limited entered into an agreement with M/s. Mannesmann VDO AG, and paid a sum of Rs. 3,56,35,156/- (from 16-8-2002 to 13-5-2003, Rs. 2,39,33,573/-) and from 14-5-2003 to 30-9-2003, Rs. 1,16,51,583/-) as services charges for technical know-how and technical assistance to M/s. Mannesmanna VDO AG. Therefore, on 30-6-2004, a show cause notice came to be issued under Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, calling upon the assessee to show cause as to why service tax, interest and penalty should not be levied on the aforesaid services. The assessee filed his reply to the said show cause notice contending that technical collaboration is a license for the manufacture and sale of the patented goods described in the schedule of the agreement. The payment of royalty is for (i) the grant of the licensor's rights for use of technical information as well as the technical assistance for the manufacture of the patented goods, (ii) the grant of righ