An Indian company  pays to a Singapore company license fees for purchase of software which is loaded on to chips procured from outside India.  The embedded chip is used in SIM card  which is sold to various institutions.  The relevant portion of  software license agreement  with   Singapore co is  re produced below:

License Grant

1) Against Payment Of the associated license fee, the  xx Singapore  company   hereby grant the Licensee a non-exclusive (save as may be stated to the contrary in Annex E) and non-transferable license to use the xxxxx  Product Software and Documentation or any portion thereof  to manufacture a-Product for the duration of this Agreement. This license shall also include the right for the Licensee to have Products manufactured by its Agents, In which case the Licensee shall be obliged to procure its best reasonable endeavors  (which shall include the obligation to make adequate provisions in agreements and institute proceedings in term thereof) to ensure that such Agents shall not do anything which would result in the Licensee being in default of any of the provisions of this Agreement. (emphasis supplied by me)

2) Once a Product is manufactured, the Licensee shall have a transferable (Only to the extent that the Licensee may sell or have sold, distribute or have distributed and otherwise dispose of or have disposed of or have disposed of Products to its customers), perpetual and irrevocable license to operate the relevant copy of the xxxxx  Product Software on the relevant Product that it was loaded onto. (emphasis supplied by me)

3)  xx Singapore   co  hereby grants the Licensee, for the duration of this Agreement only, a fully transferable license to load the xxxxx  Optional Software onto Chips, provided that the Licensee makes payment to xx Singapore co   of the associated license fee. For the avoidance of doubt, such license shall include the right for the Licensee’s Subsidiaries to allow their customers to load the xxxxx  Optional Software, which customers can in turn transfer that right to their customers etc. The Licensee (or its Agents and customers) then shall have a perpetual, transferable and irrevocable license to use the xxxxx  Optional Software so loaded to the extent required to operate the relevant Product. (emphasis supplied by me)

4)   Products may be supplied to the Licensee’s customers globally, subject to any exclusions as defined in Annex E.

5)  The Licensee may translate or otherwise modify and/or redesign the Documentation in order that the Products can be sold as the Licensee’s products. Licensee and Distributors shall not be obligated to use or reproduce any xxxxx   Intellectual  Property Rights’ notices Contained in the Documentation, and  Licensee and Distributors may remove any intellectual Property Rights’ notices Contained in the Documentation.     xx Singapore  co  will however always retain all copyright in and intellectual Property Right in and to its Documentation. (emphasis supplied by me)

6) The xxxxx  Software is owned exclusively by xx Singapore  company and consists of proprietary code developed by xx Singapore co  which is and shall remain the exclusive property of xx Singapore co  and the Licensee shall have no rights therein except  as expressly set out in this Agreement. (emphasis supplied by me)

7) When the licensee wishes to manufacture a product it shall place an order on xx Singapore co   for the corresponding number of licenses or chips that are required in terms of  clause (1) or (3) as the case may be. The decision as to whether or not the licensee orders licenses or chips from  Singapore co shall be at  Singapore co  discretion. (emphasis supplied by me)

In brief, the singapore company has IPR of  a particular software which is embedded on to chip used in the SIM card   dealt in by the Indian company. The Singapore company is the final authority as to whether to supply chips embedded with software or to supply software   on payment of license fees  to the indian company and issuing Letter of authority to the chip vendor to load the software.

Under these facts, whether Indian company can take shelter under the recent SC ruling in the case of Engineering Analysis   Centre of Excellence P Ltd for non deduction of TDS  on software payment to Singapore co.