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2019 (4) TMI 901 - CESTAT HYDERABADClassification of services - Information Technology software services or not - sale of canned software with license and condition to upgrade the said software - Held that:- The service tax liability confirmed by the adjudicating authority and upheld by the first appellate authority along with interest seems to be correct for the simple reason that appellant herein had supplied the canned software to M/s Reliance Capital Ltd for commercial exploitation - there is no hesitation to uphold the tax so raised as the definition of category ‘Information Technology Software Services’ as per the provisions of Sec.65(105)(zzzze) would cover the canned software sold by the appellant - the demand of service tax with interest is upheld. Penalty - Held that:- During the period entire thing was on flux and the Hon’ble High Court of Madras has decided the issue on 24.08.2010 on which day the canned software was considered as service falling under category of ‘Information Technology Software Services’ - Appellant may have entertained a bonafide belief that tax is not payable, can be a justifiable reason, for non discharge of service tax liability - Invoking the provisions of Sec.80 of the Finance Act, 1994, the penalty imposed by the adjudicating authority is set aside. The demand of the tax with interest upheld - penalties set aside - appeal allowed in part.
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