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TMI Blog2009 (6) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 for the period 15-3-2005 - 30-6-2005 Rs. 84,91,822 for the period 1-7-2005 - 30-9-2005 Rs. 1,23,98,691 for the period 1-10-2005 - 31-12-2005 and Rs. 47,96,478 for the period 1-1-2006 - 28-2-2006 2. We heard both sides. Order-in-Appeal No. 160/2007, dated 26-12-2007 3.The appellant is a 100 per cent EOU. They have been registered under Service Tax for rendering services under the category of 'Maintenance & Repair Service/Commissioning & Installation Service, Business Auxiliary Service and Consulting Engineering Service'. They filed three rebate claims for Rs. 26,73,601 for the period from 1-3-2006 to 31-3-2006, for Rs. 26,53,405 for the period from 1-4-2006 to 30-4-2006 and Rs. 66,10,925 for the period from 1-5-2006 to 1-6-2006, totally amounting to Rs. 1,19,37,931 for services exported under the Export of Service Rules, 2005. The lower authority passed the Order-in-Original rejecting the claims on the grounds that the services exported are mainly Software Development Services, which is not a taxable service, and the shared services also is not a taxable service under Business Auxiliary Service. The appellants are engaged in Call Centre Operation which includes customer care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id on services which are not necessary for providing export of output services, such as services of tour operators used for pick up and drop of employees, services of outdoor catering, shamiana services, event management or convention services etc., which need to be examined on case basis depending on the actual purpose for which they are used, at the time of sanction of rebate." 5. The following submissions were urged :— The appellant is a wholly owned subsidiary of M/s. Dell International Inc.-USA. They are a 100 per cent EOU with Software Technology Parks of India (STPI). They provide business process outsourcing services like call centre, IT support and back office data processing. These services are provided exclusively to Dell Group Companies and their customers outside India and all the services are exported out of India. The service fee for providing the services is the entire cost of the appellants with a marking of 10 per cent. The appellant exports 100 per cent of his services and the payment for these services exported is received in convertible foreign exchange. The appellants obtained service tax registration under the category of Business Auxiliary Service. They ut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 has held that the appellant is providing taxable service and using input services for exporting its services. In view of the said findings in the appellants' own case, the issue as to the eligibility stands settled in favour of the appellants inasfar as they are exporting taxable services and of the use of the input services in such export services. Once an issue is settled between the parties the same cannot be argued against by the Department. Reliance was placed on the decision of the Apex Court in the case of Suptd. of Central Excise v. D.C.I. Pharmaceuticals (P.) Ltd. 2005 (181) ELT 189. Our attention was drawn to the definition of "Business Auxiliary Service" in the Finance Act, 1994 and particularly to the exclusion of "Information Technology Service" from the scope of "Business Auxiliary Service." Relying on the CBEC Circular No. 62/11/2003-ST, dated 21-8-2003, the learned Advocate stated that in the light of the abovesaid clarification the services rendered by the appellants would not fall under the exclusion clause in the definition of "Business Auxiliary Service." Reliance was also placed on the decision of this Bench in the case of CCE v. Deloitte Tax Services India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on the following decisions :— (a) CCE v. GTC Industries Ltd. [2008] 17 STT 63 (Mum. - CESTAT); (b) Victor Gaskets India Ltd. v. CCE [2008] 14 STT 403 (Mum. - CESTAT); (c) CCE v. Cable Corpn. of India Ltd. [2009] 19 STT 158 (Mum. - CESTAT); (d) CCE (LTU) v. Brakes India Ltd. [Appeal Nos. E/SO/261/2008 and E/306/2008, dated 3-10-2008] (Mad.); (e) CCE&C v. Endurance Systems India (P.) Ltd. [Appeal No. E/CO/45/2008 - Mum., dated 11-12-2008]; (f) Aditya Birla Nuvo Ltd. v. CCE [Appeal No. ST/123/2008, dated 16-1-2009] (Ahd.). 9. Notification No. 12/2005 under which the claims have been filed by the Noticee stipulates the following conditions for claiming rebate :— (a) That the taxable services should be exported in terms of rule 3 of the Export of Service Rules, 2005 and payment for the export of such taxable service should be received in India in convertible foreign exchange. (b) That the duty, rebate of which has been claimed has been paid on the inputs. (c) That the service tax and cess, rebate of which has been claimed has been paid on the input services. (d) That the total amount of rebate of duty, Service Tax and cess admissible is not less than Rs. 500. (e) That Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-6-2003. The scope of IT services is explained in the definition of Business Auxiliary Service in the Act itself as any service in relation to designing, developing or maintaining of computer software or computerized data processing or system networking or any other service primarily in relation to operation of computer systems. The last words 'primarily in relation to operation of computer systems' make the intention abundantly clear. The words "back office processing" used in the clarification dated 28-2-2003 have to be read in conjunction with the other terms used therein viz., data processing, networking, computer facility management. Thus, any service of back office processing primarily in relation to operation of computer system will be covered as IT services and not taxable. Payroll processing, accounts management etc. even by using computer programmes, cannot be termed as activities primarily in relation to computer systems. The use of computer in these services is secondary and the primary activity is that of business-related work. Thus, these services will be taxable as Business Auxiliary Services. This is exactly the position that has been clarified in the circular date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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