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TMI Blog2009 (3) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... st the appellants by way of issue of show cause notice dated 24-2-2006 alleging that the services rendered by the appellant to APCPDCL will fall under the category of business auxiliary services. Consequently the show cause notice proposed a service tax for the relevant period along with educational cess. The penalties under Section 75A, 76, 77 & 78 were proposed. The appellants replied to the show cause notice that the services rendered by them are only information technology service during the relevant period and they would be going out of the service tax by virtue of the express exclusion under the category of business auxiliary service. It was also submitted that activities of spot billing and account management will not fall under the sub-clauses (i) or (vii) or (iii) or (vi) of the definition of Business Auxiliary Service. It was emphasized that the appellants are rendering services to APCPDCL and not on behalf of APCPDCL. Extended period of limitation cannot be invoked as there is no suppression with intent to evade tax. No interest or penalties are imposable as the appellant was under the bona fide belief that their activates are not taxable. 4. The Original Authority afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce as commission agent but does not include any information technology service. For removal of doubts it is declared that for the purpose of this clause information technology service means any service in relation to designing, developing, or maintaining computer software or computerized data processing or system networking or any other service primarily in relation to operation of computer systems. (2) It was submitted that in terms of the agreement entered in between the appellant and APCPDCL, the appellant is required to provide computerized data processing service which is an information technology service as defined in Explanation to Section 65(19) of the Finance Act 1994 and the same is exempt from the purview of service tax in terms of the said section. The Service was later brought into service tax net with effect from 1-5-2006 by amending the definition of information technology service. Hence as such the appellant is not liable to pay service tax on this service during the period from 1-7-2003 to 30-9-05. The appellate authority ought to have followed the ratio of the order of the CESTAT Bangalore in Bellary Computers v. CCE [2007] (8) S.T.R. 470 (Tri. - Bang) = 2007 (TI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the amendment is to be taken as clarificatory and the said clauses always intended to tax the activities incidental to those support services expressly specified in Business Auxiliary Services. It was submitted that it is not in dispute, that the activities of appellants are in no way subordinate or supplementary to services listed in sub clauses categorized as promotion or marketing or sale of goods produced or provided or belonging to the client (clause (i)), promotion or marketing of services provided by the client (clause (ii)), or any customer care service provided on behalf of the client (clause (iii)). 7. The services rendered by the appellant will not fall under clause (iii) for the reason that the clause looks to customer care service provided on behalf of the client. As per the agreement services are provided to APCPDCL. Moreover services rendered or not in the nature of any customer care service. Agreement between the appellant and APCPDCL is a two party agreement and there is no obligation on the appellant or for that matter on APCPDCL to provide spot billing services to any third party i.e. consumer of electricity. 8. It was submitted that sub-clause (vi) n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence are not taxable under the category. 10. Maintaining consumer ledger and spot billing or service taxable under the category of business support service, it was urged that business support service as a separate category was introduced with effect from 1-5-06. The statuary definition as per Section 65(104) "support service of business or commerce means services provided in relation to business or commerce and includes evaluation of prospective customers, tele-marketing, processing of purchase orders and fulfillment of services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer care service and pricing policies infrastructural support service and other transactions proceeds. The Board in it's clarification in para 3.13 has clarified that "business entities outsource a number of services for use in business or commerce. It is proposed to tax all such outsourced services. If these services are provided on behalf of the person they are already taxed under Business Auxiliary Services". It is submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the services would come within the category of information technology service and they would be specifically excluded from the scope of business auxiliary service by way of explanation to Section 65(19). They have relied on the decision of this Bench in the case of Dataware Computers v. Commissioner of Central Excise Customs & Service Tax (Guntur) [2008 (12) S.T.R. 121 (Tri. - Bang.) = 2008 (TIOL) 1422 CESTAT Bang.] wherein it is held that computerized data processing falls within the realm of information technology service and consequently it is excluded from the category of business auxiliary service. In that case also, the activity carried by the appellant was similar. Again in the case of Bellary Computers v. Commissioner of Central Excise also a similar activity was subject matter of the appeal and it was held that supply of computers, printers, hardware items generation of MIS reports and data processing would fall within the category of business auxiliary service. There was an amendment to Section 65(15) with regard to the explanation on the scope of the information technology service which was amended and till 1-5-2006 as a consequence of the amendment the said service woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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