Suhas C. Sen, J. - The following two questions have been raised by the applicant Pro-Quip Corporation USA for advance ruling :

"1. Whether the applicant is liable to tax on the amount received from Linde Process Technologies India Ltd. towards consideration for the sale of Engineering, Drawings and Designs received under Purchase Order No. 19004, dated 11-12-1998 of Linde Process Technologies India Ltd. ?

2. Whether the applicant is entitled to the refund of the tax, deducted by Linde Process Technologies India Ltd. calculated at the rate of 15 per cent on the part of the total remittance of US $ 2,59,875 together with interest on delayed payment of tax deducted at source already deposited with bank by the said company aggregating to Rs. 17,10,525 ?"

2. The case of the applicant is that it is resident in the United States of America. It was incorporated in the State of Oklahoma, United States of America on 25-6-1969 under the name of Pro-Quip Inc. The said corporation filed the Amended and Restated Certificate of Incorporation dated 3-6-1999, which was recorded by the office of the Secretary of State of Oklahoma on 14-6-1999. The name of the applicant was changed to the Pro-Quip Corporation.

3. One of the objects for which the company was incorporated was to engage in general engineering business and in general practice of engineering in all its branches, and in that capacity to make conduct, and supervise research, surveys, design and investigations into all matters and things in the field of science and technology provided this work is accomplished under direct supervision of a person who is registered as a professional engineer under the applicable statutes of the State of Oklahoma.

4. Linde Process Technologies (India) Ltd., (LPT) is a company incorporated in India having its registered office at 806 Meghdoot, 96, Nehru Place, New Delhi, India. The said company is engaged in the business of executing the turnkey projects in India, more particularly the Chemical Process Plants. The said company undertakes the work of executing the projects (jointly with foreign contractors) on behalf of its clients and also, inter alia, source for their clients the technology required for the purpose of establishing the project and supply the same to the clients.

5. LPT received the purchase order from Nirma Ltd. for design, engineering technical know-how and erection and commissioning of H. Generation Plant of 2200 Nm3/Hr. capacity for a total consideration of Indian Rupees 37,129 million. As part of execution of the said project, LPT was required to obtain and supply the engineering, drawings and designs for the setting up of the said plant. The said engineering drawings and designs were available with the applicant.

6. LPT, therefore, placed a Purchase Order No. 19004, dated 11-12-1998 with the applicant for the purpose of specified engineering, drawings and designs for the construction of Hydrogen Generation Plant for Nirma Ltd., Ahmedabad as per the specifications in accordance with the inquiry documents of Nirma Ltd. The purchase order was for the total consideration of US $ 5,77,500.

7. In accordance with the said purchase order the applicant supplied various engineering, drawings and designs from time to time and the payments were made by LPT to the applicant. LPT made a total payment of US $ 2,02,125 on 26-3-1999 and US $ 57,750 on 7-6-1999. The said payments were initially made by LPT without deduction of tax at source. However, LPT decided to make the payment of the tax by treating the said amount as taxable in India and paid the sum equivalent to US $ 38,981 to the credit of Government. This amount of US $ 38,981 from the fourth payment of US $ 1,15,500 (net payment being US $ 76,519) made on 1-9-1999. LPT made the payment to the Government of the amount deducted at source in the following manner :