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2019 (11) TMI 1477 - AT - Service TaxBusiness auxiliary service - online information data base access or retrieval service - reverse charge mechanism - HELD THAT:- The appellant had been discharging tax liability on the licence fee paid to overseas entity as recipient of ‘information technology software service’ ever since the incorporation of that entry in section 65(105) of Finance Act, 1994. On the face of it, the contention of Learned Counsel that the tax was not liable to be discharged for the period prior to such imposition would appear to be tenable. The only way in which the tax liability could crystalise before 16th May 2008 is its coverage by an existing taxable entry coupled with the express intent to discard it from such entry while including the service in a substitute entry. It is the finding of the original authority that the said activity would, within the territory, have been liable to tax in the hands of a domestic provider of service as ‘online information and data base access and retrieval service’. However, from our examination of the relevant entries, we do not find ‘information technology software service’ to have originated from a discarded entry or carved out of an existing entry. There has to be an allegation in the show cause notice beyond mere reference to the agreement between the appellant and the overseas entity and its elaboration by extracting appendix – I. Beyond that, the show cause notice has merely taken note of the payments made by the appellant, the definition of the said services under section 65(75) of the Finance Act, 1994 and by drawing upon the definition of ‘information’ in the Information Technology Act, 2000 and without adducing any other evidence has come to the conclusion of taxability. This, in our view, does not constitute a notice appropriately justifying crystalising of tax liability. Appeal allowed - decided in favor of appellant.
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