The Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) at New Delhi held that trademark ownership must be verified through official registration records maintained by the Registrar of Trademarks and not from unverified online sources, and confirmed the appellant’s entitlement to benefit under the relevant service tax exemption notification.
Satnam Singh Oberoi and Harvinder Singh Oberoi, the appellants, had provided the renting of immovable property and franchise services to Texla Electrovision, a partnership firm run by their spouses. Each appellant received monthly rent and royalty, and initially availed of the small service provider exemption under Notification No. 6/2005-ST, as amended. After crossing the threshold, they paid service tax on the consideration received.
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During audit, the department alleged that the brand name “TEXLA” used in providing franchise service was not registered in the names of the appellants but only in the name of their brother, Amrik Singh Oberoi. Based on this reasoning, it was held that the appellants were not eligible for the exemption, and service tax demands were confirmed.
On appeal, the Commissioner (Appeals) accepted the exemption in the case of Amrik Singh, but denied it to Satnam and Harvinder Singh, relying on information sourced from an external website (indiafilings.com) which did not show them as registered trademark owners.
The appellants’ counsel challenged the findings, submitting certified trademark registration certificates from the Registrar of Trademarks, which clearly named them as co-owners of the brand names “TEXLA” and “TEXLAVISION.” They argued that the Commissioner (Appeals) erred in relying on an unofficial online portal instead of government records. Since they were co-owners of the brand, the restriction under the exemption notification, excluding service providers using someone else’s brand, did not apply.
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The tribunal comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) found that the certificates issued by the Registrar of Trademarks conclusively established ownership and overruled the department’s objection based on third-party website data. The tribunal held that the benefit of the exemption notification was wrongly denied and deserved to be restored.
Both appeals were allowed, and the portion of the order denying exemption to the appellants was set aside. The tribunal directed that appropriate consequential relief be granted as per law.
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