TMI Blog2023 (12) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... IES LIMITED [ 2022 (8) TMI 283 - SUPREME COURT ]. It is notice that the Hon ble Apex Court in the case of Quick Heal Technologies Ltd. has clearly held that software loaded on a medium like USB/CD/Hard Drive etc. is goods and not services. From the above case, it is apparent that with software is supplied loaded on a medium then the same is to be treated as sale and not a service. In the instant case, it is not in doubt that software has been supplied loaded as a medium. Therefore it attains character of goods. Consequently, the demand in the instant case cannot be sustained. The impugned order is set aside - appeal is allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri. J.C.Patel, Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out that the agreement with M/s. HCL Info systems Limited is an agreement for permanent transfer of intellectual property right which is not covered under Service Tax liability. He pointed out that entire software is encoded on CD and therefore, it becomes goods and therefore is not liable to Service Tax. He further pointed out that even extended period of limitation cannot be invoked to recover tax in the instance case. He relied on the decision of Hon ble Apex Court in case of Quick Heal Technologies Ltd-2022 (63) GSTL 385 (S.C.). He also relied on the decision of Hon ble Apex Court in the case of Tata Consultancy Services vs. State of Andhra Pradesh-2004 (178) ELT 22 (S.C.). In these cases, it has been held that when software is suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so. There was, however, a distinction drawn insofar as the uncanned software and canned software alternatively termed as unbranded and branded is concerned. The distinction is in that a canned software contains programmes which can be used as such by any person purchasing it, while an uncanned software is one prepared for a particular purchaser s requirements by tweaking the original software to adapt to the specific requirements of a particular entity. While a canned software could be sold over the shelf, an uncanned software is programmed to specific and particular needs and requirements. This Court held that in India the test to determine whether a property is goods , for the purpose of sales tax, is not confined to whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the intellectual property has been incorporated on a media for purposes of transfer. Sale is not just of the media which by itself has very little value. The software and the media cannot be split up. What the buyer purchases and pays for is not the disc or the CD. As in the case of paintings or books or music or films the buyer is purchasing the intellectual property and not the media i.e. the paper or cassette or disc or CD. Thus a transaction/sale of computer software is clearly a sale of goods within the meaning of the term as defined in the said Act. The term all materials, articles and commodities includes both tangible and intangible/incorporeal property which is capable of abstraction, consumption and use and which can be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no opinion thereon because in case of unbranded software other questions like situs of contract of sale and/or whether the contract is a service contract may arise . 43 . Associated Cement Companies Ltd. (supra) considered the question whether the drawings, designs, etc. relating to machinery or industrial technology were goods, leviable to duty of customs on their transaction value at the time of import. It was argued that the transfer of technology or know-how though valuable was intangible. The technology when transmitted to India on some media does not get converted from an intangible thing to tangible thing or chattel and that in a contract by supply of services there is no sale of goods, was the argument. Reading Section 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y chattel sold as chattel, which can be regarded as goods, has no role to play in the present statutory scheme as we have already observed that the word goods as defined under the Customs Act has an inclusive definition taking within its ambit any moveable property. The list of goods as prescribed by the law are different items mentioned in various chapters under the Customs Tariff Act, 1997 or 1999. Some of these items are clearly items containing intellectual property like designs, plans, etc. . 47 . Justice Dr. A.R. Lakshmanan, in his separate but concurring judgment, highlighted the following attributes in para 97 of the judgment to constitute a transaction for the transfer of right to use the goods :- 97. xx xx xx ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
