TMI Blog2020 (2) TMI 1377X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of Anti-virus software. Needless to say that VAT and Service Tax are mutually exclusive. Demand of service tax on the very same amount is against the settled position of law - Appeal allowed - decided in favor of appellant. - Service Tax Appeal Nos. 41041-41043/2013 - Final Order No. 40108-40110/2020 - Dated:- 6-2-2020 - Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) And Hon'ble Shri C.J. Mathew, Member (Technical) Shri N. Viswanathan, Advocate, for the Appellant Shri Vikas Jhajharia, AC (AR) for the Respondent ORDER Per: Sulekha Beevi The issue involved in all these appeals being the same, they are heard and disposed by this common order. 2.1 Appellants are engaged in the software develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Information Technology Software Services . Show Cause Notices were issued proposing to demand Service Tax along with interest and penalty for the periods May 2008 to June 2009, July 2009 to March 2010 and April 2010 to March 2011. After due process of law, the original authority confirmed the demand along with interest and imposed penalty. Aggrieved by such orders, appellants are now before this Tribunal. 3. On behalf of the appellants, Ld. Counsel, Shri N. Viswanathan appeared and argued the matter. He explained that the appellants replicate the software in CD form by engaging the replicators located in Jharkhand and other premises who enjoy central excise exemption under Notification No. 50/2010-CE dated 21.12.2010. They supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. He submitted that the appellant is engaged in developing Anti-virus software services under the brand name K7 . Along with such software they provided a license key to the users. The software is made available through online sales as well as through Distributors, Affiliates and Resellers. The software is replicated in the form of CD in an unit belonging to IP softcom situated at Rudrapur. The said area is covered under exemption Notification No. 50/2003-CE dated 10.06.2003. The software can be either downloaded from their website or customers can obtain a CD by purchase. It will have a license key which is essential for installing the software in the user's computer. The contents of the CD alone will not enable the use of software. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computer system. The Appellant further contends that the software developed by it is quite distinct from software like ERP, EXCEL, MS Word, where there is a constant to and from interaction between the user and the computer system containing the said software. These software perform their function only after receipt of input from the user, which is not the case in the Antivirus software developed by the appellant. 29. It is not possible to accept this finding. The Antivirus Software developed by the appellant is complete in itself to prevent virus in the computer system. Once the computer system is booted, the Antivirus Software begins the function of detecting the virus, which continues till the time the computer system remains booted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) of article 366 (29A) of the Constitution. 52. Thus, none of the contentions advanced by learned Authorized Representative of the Department have any tax. 53. It is, therefore, not possible to sustain the impugned order for all the reasons stated above. It is accordingly, set aside and the appeal is allowed. 6.2 The Tribunal in the above stated order has held that the sale of Antivirus Software or updates thereof is sale of goods and that the activity does not attract levy of service tax under ITSS. Further, the appellant has discharged VAT on the amounts received by sale of Anti-virus software. Needless to say that VAT and Service Tax are mutually exclusive. Demand of service tax on the very same amount is against the settled p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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