December 2013
2013 (32) STR 86 (Tri.-Mum) Global Transgene Ltd. vs. Commr. of C. Ex., Cus. & S.T., Aurangabad
By Puloma Dalal, Jayesh Gogri, Mandar Telang, Chartered Accountants
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Package containing only a mark showing the technology used which is not a logo or trademark or hallmark of the assessee, cannot be considered to be granting representational rights. Therefore, the same is not covered under franchise services.
Facts:
The appellant obtained licenses, for self-use and to transfer the technology to sub-licensees, from a Chinese company. Accordingly, the department contested that the activity of sub-licensing was covered under franchise services as franchise rights
were given to the sub-licensees. The appellants stated that the activity of sub-licensing was not covered under the definition of ‘franchise service’. The appellants also produced samples of products which did not contain any logo or hallmark or trademark of theirs. In fact, the package label clearly indicated that the seeds were manufactured and marketed by sub-licensees in their own name. The agreement was for transfer of technology in the form of seeds for a consideration. Further, though they provided certain training, the same was common in case of imported technologies and it could not be construed as providing representational rights. Revenue argued that one of the sub-licensees stated that the appellants had granted right to use logo and 3D hallmark of the technology which are clearly identifiable with the appellants. Further, only after testing the seeds, the appellants supplied 3D hallmark.
Held:
The appellants were not granted any representation rights to represent the Chinese company in India and the appellants neither were entitled to nor granted any representational rights to sublicensees. The mark denoted on the package was neither a logo nor a trademark or hallmark of the appellants but was only denoting that the seeds contained the technology. The case thus was decided in favour of the appellants.
