TMI Blog2009 (4) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice is definitely for use in furtherance of business and commerce and the service under dispute is for the implementation. So, implementation of the ERP services is specifically covered under the information technology service, which was effective only from 16-5-2008. Under these circumstances, it cannot be liable to Service Tax for a period prior to that - ST/422/2007 and ST/512-513/2008 - 973-975/2009 - Dated:- 16-4-2009 - S/Shri T.K. Jayaraman, Member (T) and M.V. Ravindran, Member (J) Shri Mahesh Jaising, Advocate,for the Appellant. Ms. Joy Kumari Chander, Jt. CDR, for the Respondent. [ Oder per: T.K. Jayaraman, Member (T)]. - All these appeals have been filed against the following orders of the Commissioner of Service Tax, Bangalore. The details of these appeals are given in the following tabular column. Appeal No. Order dated Period Service Tax and Interest Penalty ST/422/2007 5-9-2007 8-32003 to 8-9-2004 Rs.1,73,23,101/- Rs. 200/- per day u/s 76 Rs. 1000/- u/s 77 Rs. 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding .. (iii) adaptation, upgradation, enhancement, implementation and other similar services related to information technology software . 4.2 The following cases have held that introduction of new entry im plies that services were not taxable earlier:- (a) BCCI v. CST [2007 (7) S.T.R. 384 (Tribunal - Mumbai)] (b) Glaxo Pharmaceuticals [2006 (3) S.T.R. 711 (Tri.-Mumbai) = 2007 (188) E.L.T. 171 (CESTAT-Mumbai)] (c) CCE v. MRF Ltd. [2004 (179) E.L.T. 472 (Tri.-Chennai)] (d) Kaveri Telecom Products Ltd. [2006 (1) S.T.R. 226 (Commr. Appl.) = 2006 (4) STJ 990 (Commissioner, Appeals, l3angalore)] 4.3 The ERP implementation services would not be covered under the management consultancy services due to the following reasons:- (a) The services are not in connection with the management of an organization. (b) The services would not be covered under the inclusive part of the definition (i.e. Advice, consultancy or technical assistance with regard to specific activities). (c) Services provided by the appellant is executory in nature and hence do not fall under management consultant services . (d) Although the ERP software per se may be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... May 16, 2008, i.e. after introduction of information technology software services, this exclusion has been withdrawn. (d) The three SAP cases mentioned above specifically state that soft ware implementation services would be classifiable under 'consulting engineer's services' and not 'management consultancy services'. (e) It should be noted that despite various amendments to the definition of taxable services the definition of consulting engineer has remained constant during the above periods. 4.7 Alternatively activity of ERP implementation service falls under 'in formation technology service' which was specifically excluded from the Service Tax under the 'business auxiliary service'. 4.8 It should be noted that the scope of information technology services under business auxiliary services covered services primarily in relation to opera tion of computer systems. 4.9 The above exclusion was removed w.e.f. May 16, 2008 only when the category of 'information technology software services' was introduced. 4.10 It was argued that exclusion from one entry implies that the ser vice is not taxable under another category. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;consulting engineering services' in the definition itself. Once a particular service is excluded from the scope of service tax where it normally is supposed to fall then it cannot be taxed under some other category. This principle has been followed in the case laws of Federal Bank Ltd. and also Lal Pathlabs Ludhiana, Collection Centre cases which have been cited earlier. However, w.e.f. 16-5-2008, information technology service was introduced. The definition of information technology service is any service provided or to be provided to any person in relation to information technology software for use in the course, or furtherance, of business or commerce, including. (i) development of information technology software, (ii) study, analysis, design and programming of information technology software, (iii) adaptation, up gradation, enhancement, implementation and other similar services related to information technology software, (iv) providing advice, consultancy and assistance on matters related to information technology software, including conducting feasibility studies on the implementation of a system, specifications for a database design guidance and assistanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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