S.L. Peeran, Judicial Member (Oral) - The assessee has already deposited the Service Tax of Rs. 39,98,975/- after the issue of show cause notice. The learned counsel submits that penalty of like-sum is not leviable in the matter, as the issue pertaining to levy of Service Tax under "Intellectual Property Service" is under challenge.

2. The appellants have transferred technical know-how, which according to them cannot come within the ambit of "Intellectual Property Right". They submit that this is a different aspect of the matter according to the definition. The learned counsel submits that as the assessee were holding bona fide that they are not covered under the category, the levy of penalty is not justified in the matter. He submits that as they have deposited the Service Tax, they be given waiver for interest and penalty.

3. The learned SDR takes us through the findings of the Commissioner and submits that passing on Technical Know-how is covered to "Intellectual Property Right". He refers to Section 65(55aA) of the Finance Act, 1994 as amended from time to time and to the definition of "Intellectual Property Rights" to mean any right to intangible property, namely, trade marks, designs, patents or any other similar intangible property, under any law for the time being in force, on which services are provided by transferring temporarily or permitting the use or enjoyment of, any of Intellectual Property Right, therefore, the tax levied is justified.

3.1 She files para-wise comments and also relies on the ruling rendered in the case of M/s. Modi-Mundipharma Pvt. Ltd. v. CCE, Meerut - 2008 (12) S.T.R. 189 (T.) = 2008-TIOL-1494-CESTAT-DEL where a prima facie finding has been given that right to use technical know-how would come within the ambit of "Intellectual Property". The Bench has directed pre-deposit of the amount, however, they have given waiver for pre-deposit of penalty. She again refers to the ruling of Hyundai Motors (India) Ltd. v. CST, Chennai - 2008 (10) S.T.R. 281 (Tri.-Chennai) wherein transfer of technical know-how by a ‘consulting engineering’ has been considered to come within the ambit of "Intellectual Property Services". In this case also they have held that penalty is not leviable, as during the time, there was a reasonable cause and plea with regard to its non-includability under "Intellectual Property". The learned DR again relies on the ruling of M/s. Hero Cycles Ltd. v. CCE, Ludhiana - 2008-TIOL-1483-CESTAT-DEL wherein transfer of technical know-how from a Japanese company has been held to be coming within the ambit of "Intellectual Property".

4. The learned counsel distinguishes these judgments and submits that only patents which are registered would come within the ambit of "Intellectual Property Right" and not transfer of technical know-how. He relies on the Board’s Circular also.

5. We have carefully considered the submissions. We notice from the cited rulings given by the learned SDR that respective benches have waived and also set aside the penalty. Therefore, the prayer of the appellants for waiver of pre-deposit of interest and penalty during the pendency of the appeal is accepted. The stay application is allowed by granting waiver of pre-deposit of penalty and interest during the disposal of the appeal. Appeal to come up in its turn. There shall be no recovery even after expiry of 180 days.