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2013 (9) TMI 109 - AT - Service TaxService tax liability - Classification - Bundled service - Business Auxiliary service - operating specified Spot Billing Centres and their maintenance. - processing bills and receiving payments through cheques and for issuing bills cum receipts to consumers - Several agreements between the assessee and Dakshinanchal Vidyut Nigam Ltd. (DVVNL) revealed that it was providing BAS to DVVNL; that for the period in issue - 10.9.2004 to 31.3.2006, the assessee failed to obtain registration as a service tax provider; to remit tax for the taxable services provided; and the assessee is consequently liable to remit service tax, interest and penalties as specified in the Show-cause Notice - Adjudicating authority concluded that the assessee was providing the taxable BAS and confirmed liability of service tax – Subsequently, the appellate authority on independent analysis of the agreements which are the basis for the services provided by the assessee, concluded that services provided are comprehended within support service of business or commerce and not BAS. Held that:- the bundled services provided by the assessee require to be analysed for identifying the appropriate classification, in accordance with the guidance provided by provisions of Section 65A (2)(b). The assessee has offered a bouquet comprising different services which include information technology services and Business Auxiliary Services as well. Which of this complex of services provides the essential character to the asessee’s transaction is the issue. Exclusion of information technology service from BAS - Held that:- from the definition of BAS qua Section 65(19) of the Act, it is clear that to fall within (the excluded) information technology service, the service should primarily be a service in relation to designing or developing software or system networking or any other services in relation to operation of computer system. If however, the designing or developing of computer software or systems networking or services in relation to operation of a computer system is a mere adjunct of another or other substantial raft of services to be provided, the service would not amount to information technology service within the meaning of the expression and the context in which this exclusionary clause is designed in the frame work of the definition of BAS, under Section 65(109) The activities of the assessee relate back office services, to lead tax services, international assignment services and other business activities and not related to development of software. The generic nature of the assessee’s operations was held to fall within BAS and not Information Technology Service. Relying upon the judgment in the case of CCE, Vs. Deloitee Tax Services India Pvt. Ltd [2008 (3) TMI 35 - CESTAT, BANGALORE]; Phoenix IT solutions Ltd. Vs. CCE [ 2011 (1) TMI 642 - CESTAT, BANGALORE], it is held that reasons recorded above that the ld. Appellate Commissioner erred in concluding that the transactions of the assessee constituted support services for business or commerce and not business auxiliary services, as held by the adjudicating authority. This conclusion of the appellate Commissioner is misconceived and is predicated on an erroneous analysis of provisions of Section 65(19) of the Act, applied to the facts and the material on record – Decided in favor of Revenue.
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