TMI Blog2013 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... on any legal decision either. - demand confirmed invoking the extended period of limitation - Decided against the assessee. Penalties - held that:- simultaneous penalties u/s 76 and 78 can not be levied - option given to pay 25% penalty. - Appeal No. ST/MISC/51/13 & S/267/2007 - Final Order No. 40049/2013 - Dated:- 5-2-2013 - Shri P.K. Das and Shri Mathew John, JJ. For the Appellant: Smt. Radhika Chandrasekar, Advocate For the Respondent: Shri K.S.V.V. Prasad, JC (AR) JUDGEMENT Per Mathew John; The appellants are engaged in sale of hardware and banking related application software under licence to use and also are rendering services in relation to maintenance of said software including its allied software modules to various banks. The scope of their activity as ascertained by the department based on statement of the Managing Director of the company as seen from the impugned order is as under :- A statement was recorded from Mr. Nagaraj V. Mylandla on March 27,2006 Managing Director of FSS, who interalia stated that FSS was started in February, 1991 as a private limited company and is engaged in the activities of software development, software sales and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnical inspection and certification Services [section 65 (105) (zzi) and section 65 (108) of Finance Act 199$] for periods as mentioned above and issued SCN demanding service tax on the above services and after adjudication an amount of Rs.1,95,97,383/- was confirmed in respect of maintenance of software and Rs.6,99,553/- was confirmed in respect of certification of the ATM services. Aggrieved by the order of the Commissioner, appellants have filed this appeal. 4. Revenue has demanded service tax for the services of software maintenance under the category of Management, Maintenance or Repair Service as defined under section 65 (64) of Finance Act,1994 brought into force w.e.f. 1.7.2003. This definition changed on 16.6.2005 and again on 1.5.2006. The original definition is reproduced herein below:- (64) Maintenance or repair means any service provided by (i) any person under a maintenance contract or agreement; or (ii) a manufacturer or any person authorised by him, in relation to, (a) Maintenance or repair, or servicing of any goods or equipment The amendment made on 16.6.2005 is not relevant to the dispute at hand. The basic dispute at hand is whether soft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he also points out that during the period under dispute Information Technology Service was specially mentioned in section 65 (19) defining Business Auxiliary Service for the purpose of keeping suchservice outside the scope of levy of service tax. When there was a conscious intent to keep the services of the type rendered by appellant outside the scope of service tax as seen from Explanation, which was in force in section 65 (19) of Finance Act, 1994 during the relevant time, it is not reasonable to demand service tax from the appellant giving a new interpretation with retrospective effect to the word goods used in the definition of the service for Management Maintenance or Repair Service to levy tax thereon. 6. She points out that the Tribunal has already decided that during the relevant period maintenance of software should not be subjected to service tax and she relied on the following decisions :- 1) Kasturi Sons Ltd. Vs UOI 2011 (220) STR 129 (Mad.) 2) Phoenix IT Solutions Ltd. Vs CCE 2011 (22) STR 400 3) SAP India Pvt. Ltd. Vs CCE 2011 (21) STR 303. 7. In respect of second category of service, her contention is that this service was specifically brought int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior to 1.5.2006 was examined by the Hon ble Madras High Court in the case of Kasturi Sons Ltd. (supra) and ruled that such demand is not maintainable. The decision of the Apex Court in the case of Martin Lottery Agencies Ltd. (supra), also is very emphatic to say that Explanation added under in taxation statutes causes adverse consequences to tax payers could have only prospective effect. Therefore case of Revenue as far as the first issue, is not maintainable. 10. In the case of certification of ATM services, we find that the activity was squarely covered by the definition that existed during the relevant time. The fact that a new service was introduced for ATM service covering various other activities in relation to ATM service cannot be interpreted to mean that prior to that date certification service was not taxable. Therefore, we are not in agreement with the contention of the appellant in this respect. Their plea of bonafide belief regarding non-taxability of their activity is not based on any legal decision either. So we do not find any merit in their prayer that extended period of time cannot be invoked for demanding tax short paid in respect of this matter. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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