CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. – IV [Arising out of Order-in-Appeal No. 695 (CRM)ST/JDR/2018 dated 03.07.2018 passed by the Commissioner of Central Excise & Central Goods and Service Tax (Appeals), Jodhpur]

M/s. Bajaj Resources Limited …Appellant (Formerly known as M/s. Bajaj Consumer Care Limited), Old Station Road, Udaipur, Rajasthan - 313001 VERSUS Commissioner of Central Excise and CGST, Udaipur …Respondent

142-B, Sector-11, Hiran Magri, Udaipur, Rajasthan - 313001 WITH Service Tax Appeal No. 51121 of 2017 [Arising out of Order-in-Original No. UDZ-EXCUS-000-COM-0115-16-17 dated

28.03.2017 passed by the Commissioner of Central Excise, Udaipur]

M/s. Bajaj Resources Limited …Appellant Sevashram Chauraha, Old Station Road, Udaipur, Rajasthan VERSUS Commissioner of Central Excise and CGST, Udaipur …Respondent

142-B, Sector-11, Hiran Magri, Udaipur, Rajasthan - 313001 APPEARANCE:

Shri B.L. Narasimhan and Ms. Shagun Arora, Advocates for the Appellant Shri Aejaz Ahmad, Authorized Representative for the Respondent CORAM:

HON’BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL)

HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

DATE OF HEARING: 25.02.2025 DATE OF DECISION: 06.06.2025 FINAL ORDER No. 50874-50875/2025 DR. RACHNA GUPTA Present order disposes of two appeals pertaining to the same appellant and involving the same issue. The details of both the appeals are as follows:

2. The facts in brief which have culminated into the said order, in brief, are as follows:

2.1 M/s. Bajaj Resources Limited [Formerly known as M/s. Bajaj Consumer Care Limited (BCCL)], the appellant herein, are registered with the service tax department under the category of “Intellectual Property Services”. The appellants were paying service tax under the said category towards grant of license to M/s. Bajaj Corp Limited (hereinafter referred to as ‘BCL’), a wholly owned subsidiary of M/s. BCCL for use of its trademark on a non- exclusive basis in the defined territory (State of Andhra Pradesh) for a period of 10 years in terms of Trademarks License Agreement dated 12.03.2008. Vide agreement dated 22.01.2010, the tenure of the license was increased from 10 years to 25 years and the territory was State of Rajasthan. The said agreement was further novated vide agreement dated 24.02.2010 vide which the tenure was increased from 25 years to 99 years and the license was granted on exclusive basis worldwide. However, M/s. BCCL still continue to pay service tax under the category of Intellectual Property Services. Later when it was realized that the amount of royalty which is received by M/s. BCCL from M/s. BCL for grant of exclusive license to BCL that it shall not attract service tax in the new service tax regime w.e.f. 01.07.2012, it being ‘Deemed Sale’ within the meaning of Article 366 (29A) of the Constitution of India which is specifically excluded from the definition of term ‘service’ as per Section 65B(44) of Finance Act, 1994.

2.2 Based on the said understanding, the appellant filed a refund claim for Rs.79,52,935/- on 05.12.2014 in respect of service tax paid on royalty received during the period 2013-14. While scrutinizing the said refund, it was observed that the agreement dated 24.02.2010 based whereupon the impugned refund claim was filed, grants license to use trademarks or goods and does not transfer the legal right of possession. Resultantly, the transfer of use of trademark in such circumstances cannot be termed as ‘Sale’ or ‘Deemed Sale’. The transfer shall continue to be called as a taxable service i.e. ‘Intellectual Property Service’ and the amount of royalty received shall be the consideration for rendering the said service on which the appellant was liable to pay service tax. Hence the service tax/amount in question was rightly paid. Also, it was opined that the incidence of tax has been passed on to the other persons. Accordingly, vide show cause notice dated 03.02.2015, the refund claim of Rs.79,52,935/- was pra