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2018 (4) TMI 150 - AT - Central ExciseClassification of software - Finacle Software developed and customized for banks - whether the Finacle software supplied by the applied to various banks, merits to be classified under 8523 8020 as Information Technology Software and charged to Excise duty? - Held that: - for the period from March 2006 upto 15.05.2008 excise duty is to be paid only for the value of the Finacle software in packaged form i.e. recovered in the form of licence fee - w.e.f. 16.05.2008 the appellant is liable to payment of service tax under the definition of ITSS. The definition of ITSS under Section 65(105) (zzze) includes the transfer of right to use as well as other services carried out by the appellant. Since the service tax has been paid by the appellant w.e.f. 16.05.2008, the appellant is required to make payment of excise duty on the value of the software but the same, if paid, can be allowed as cenvat credit of input services for discharge of service tax on ITSS. Whether such software is in the nature of customised software i.e. designed, developed for a specific user or client OR whether it is in the nature of packaged software or canned software i.e. software developed to meet the needs of a variety of users and which is intended for sale or capable of being sold off the shelf? - Held that: - in respect of Finacle software, there is an element of supply of software developed to meet the needs of a variety of users. Since Finacle software is not developed, ab initio, for supply to each and every customer, such software falls within the category of packaged or canned software. Such software cannot be considered as customized software designed and developed for a specific user. Benefit of N/N. 22/2009 dt. 07.07.2009 - Held that: - the software licence only allows the purchaser of the software to use the Finacle software. Since the transfer of licence is not for the purposes cited in the notification, the appellant will not be eligible for the benefit of the notification. Time limitation - Held that: - department was not aware of the fact since 16-05.2008, demand not hit by time limitation. The issue is remanded to the adjudicating authority for requantifying the demand - appeal allowed by way of remand.
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