Intellectual Property -bt

Deputy Director, Directorate General of Central Excise Intelligence, Kolkata Zonal Unit : 4/2, Karaya Road ( 3rd Floor) Kolkata – 700 017

March 11, 2006

Dear Sir, Sub: Service Tax on “Intellectual Property Service” Please refer to your letter no. DGCEIF No. 17/KZU/KOL/ST/06/1775 dated 9/3/06 wherein you have requested for information relating to receiving intellectual property service and payment of royalty for such service. In this connection we would like to inform you that we have already registered ourselves under the category Intellectual Property Services. A copy of the registration certificate is enclosed herewith for your reference. Details of Royalties and service tax paid for the period from 10.9.2004 till date is as follows:Period

Date of Royalty Payment

10-9-2004 to 30- 9-2004

January, 05

October, 04 to March, 05

May, 05

April, 05 to September, 05

Nov, 05

Royalty amount

Service Tax & Tr- 6 Challan Education Cess no. & Date Amount 2,09,465 10, 474 + 209 01/05-06 dated 25/02/2005 12,41,261 62063+2483 06/05-06 dated 06//06/2006 13,85,618 69,281 + 2771 13/05-06 dated 3/12/2005

We would like to inform you in this respect that while making payment of service tax, we have availed deduction of cess paid under Research & Development Cess Act, 1986 from the total service tax payable in accordance with notification 17/2004 – S.T. dated 10-92004. As desired by you we are enclosing the following documents for your reference:a) A copy of the agreement with Pirelli Pneumatic S.P.A., a company organized under the laws of Italy; b) Copy of ST-3 returns submitted till date; c) Audited Balance Sheet for the year 04-05 and un-audited Balance Sheet for the first three quarters of 2005-06.

We hope that our clarifications stated above will ensure dropping of any further investigation in this respect. Thanking you, Yours faithfully, For Birla Tyres Authorised Signatory