TMI Blog2019 (5) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Corporation, USA, in turn recover the software usage charges paid to the overseas software vendors from their subsidiaries or associated companies including the appellant based on the number of software licence used by them. It is his contention that none of these software vendors had sent their personnel to India to provide the software services to the appellant. The software support was provided through internet. The appellant are paying service tax on the said services w.e.f. 16th May 2008 under the category of Information Technology Software Service on the payments made to M/s Lear Corporation, USA for software licences received by them. Assailing the impugned order the Learned Advocate has further submitted the appellants had obtained various specialized designing software, namely, CAD software, CATIA V5, UG, etc. from Lear Corporation, USA. For use of the said software liecence fee for such usage of the software are payable on annual basis. Merely because the nomenclature in the consideration as software maintenance charges cannot alter the factual scenario. It is the substance of the transaction that is relevant rather than the nomenclature given to the transaction. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Central Excise 2011 (22) STR 400 (Tri.-Bang), Kasturi Sons Ltd v. Union of India 2011 (22) STR 129 (Mad.) and Oracle Financial Services Pvt Ltd v. Commissioner of Service Tax 2015 (40) STR 316 (T). The demand confirmed for the period prior to 31st May 2007 is liable to be set aside on this ground itself. 6. He has further contented that the adjudicating authority has wrongly held that Information Technology Software Services was carved out as a separate taxable service so as to comprehensively cover all IT services which were earlier covered under the categories like Maintenance and Repair Service , Consulting Engineering Service , etc. It is their contention that the entry introduced at a later date would prevail over the general entry existing at a previous date. The activities like software upgradation, etc. were leviable to service tax for the first time under the taxable category of Information Technology Software Services , which cannot be made liable to service tax for the period prior to introduction of the said levy. Further, they have submitted that even assuming without accepting that the activity of maintenance of software is covered u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Ld. A.R. for the Revenue reiterates the findings of the learned Commissioner. He has submitted that as per the software usage agreement, the Appellant was required to pay the annual maintenance charges which their counterpart at USA require to pay various vendors of the software. Hence, the amount paid is nothing but the consideration towards management, maintenance or repair service, hence leviable to service tax under the said category during the relevant period. 9. Heard both sides and perused the records. The short issue involved in the present appeal is 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. Besides, whether the amount received under the said agreement prior to 01.3.2008 chargeable to service tax under reverse charge mechanism. 10. Undisputedly, by an agreement between the Appellant and M/s Lear Corporation, USA for usage of software, the Appellant agreed to pay annual maintenance cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the Bills raised by M/s Lear Corporation, USA that the amount charged to the Noticee is for the maintenance of the software used by the Noticee. The contention of the Noticee that the payments made by them in foreign currency to M/s Lear Corporation, USA was towards the Licence charges for acquiring the right to use of IT software services on a periodical basis is not supported with any evidence. The Noticee have not produced any documentary evidence to show that the payments made were to acquire the right to use and not on maintenance of software. On the other hand, clause 2 of the Software Usage Agreement and the Bills raised by M/s Lear Corporation, USA conclusively prove that the payments under consideration were for maintenance of the software and not for acquiring the right to use IT software. Relevant bills clearly mention the payment is for Support software maintenance . As such, the contention of the Noticee is not tenable on material facts and the evidences on record and thus, does not merit favourable consideration. 10. Assailing the above findings, the Appellant has submitted that the learned Commissioner has failed to appreciate that under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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