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2019 (5) TMI 464 - AT - Service TaxClassification of services - Reverse charge mechanism - appellant procured and utilized the design software of M/s Lear Corporation, USA through an online computer network - whether the services received by the Appellant from M/s Lear Corporation, USA against software usage agreement are in the nature of management, maintenance or repair service as alleged by the Revenue or in the nature of information technologies software service claimed by the Appellant? HELD THAT:- Undisputedly, by an agreement between the Appellant and M/s Lear Corporation, USA for usage of software, the Appellant agreed to pay annual maintenance charges which M/s Lear Corporation, USA required to pay to the vendors of the softwares. These charges which have been paid by the Appellant to M/s Lear Corporation, USA has been claimed as software usage charges and not maintenance charges for the software - Further, there is no evidence in support of the claim of the Appellant that what they were required to pay M/s Lear Corporation, USA was not the maintenance charges for usage of the software but the charges for the software. On the other hand, M/s Lear Corporation, USA had paid to the vendors maintenance charges of the software which they ultimately collected from the Appellant. Therefore, the Ld. Commissioner has rightly classified the services received by the Appellant under the category of management, maintenance, or repair service under Section 65 (105)(zzg) read with Section 65(64) of Finance Act, 1994. Whether the services received through internet is taxable from 01.03.2008 as claimed by the Appellant? - HELD THAT:- The issue has been considered by this Tribunal in the case of VODAFONE CELLULAR LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2017 (12) TMI 1205 - CESTAT MUMBAI] where it was held that Such services were brought into tax net by insertion of proviso to Rule 3 (ii) of the Taxation of Services (Provided From Outside India and Received in India), Rules, 2006 vide N/N. 6/2008 - ST dt. 01.03.2008 - thus, the Appellant is required to discharge service tax from 01.03.2008. The matter is remanded to the Adjudicating Authority to recalculate the demand for the period from 01.03.2008 onwards - the imposition of penalty under Section 78 of Finance Act, 1994 is unwarranted. However, penalty under Section 76 and 77 are imposable on the Appellant, hence sustained - appeal allowed by way of remand.
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