TMI Blog2021 (2) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... h the view taken by the High court of Madras in KASTURI SONS LTD, CHENNAI VERSUS UNION OF INDIA OTHERS [ 2011 (2) TMI 76 - HIGH COURT OF MADRAS] , where it was held that There was no occasion to consider the implications of the Finance Act 2003 to 2006 in respect of the terms 'information technology' and 'maintenance of software' and the decision rendered in Tata Consultancy Service v. State of Andhra Pradesh [2004 -TMI - 4143 - Supreme Court] in the context of the said Act under Entry 54, List-II of VII Schedule to the Constitution cannot be cited for a clarification in respect of the Finance Act, 1994 which is a Parliamentary enactment. It is pertinent to mention here, that in the show cause notice itself no alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent? . 2. Facts leading to filing of this appeal briefly stated are that the respondent is engaged in providing services with regard to maintenance and repair of computer software. Vide Notification dated 21.08.2003, the maintenance services related to computers, computer systems or computer peripherals were exempt from payment of service tax. The Central Board of Direct Taxes (CBDT) issued a circular dated 17.12.2003 by which it was clarified that the maintenance of repair of computer software would not be liable to service tax inasmuch as the same does not amount to maintenance or repair of tangible goods. The Notification dated 21.8.2003 was withdrawn by a Notification dated 09.07.2004 and thereafter, the liability to pay serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was withdrawn with effect from 09.07.2004 therefore, the respondent was liable to pay service tax for the period from 09.07.2004 to 06.10.2005. It is further submitted that during the course of audit of the records of the assessee it was found that they were providing software maintenance services and they haven to paid the service tax. It was further contended that the assessee have failed to apy the service tax in respect of services which were taxable under Section 68 and 70 of the Act. Therefore, the extended period of limitation would apply. 4. On the other hand, learned counsel for the respondent has referred to decision of the High Court of Madras in 'KASTURI AND SONS VS. UNION OF INDIA', (2011) 22 STR 129 (Mad.) and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittance, evaluation of prospective customer and public relation services. And includes services as a commission agent, but does not include any information technology service. Explanation - For the removal of doubts, it is hereby declared that for the purposes of this clause information technology service , means 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. 7. That was also followed in the Finance Act, 2004 with effect from 10.09.2004 and that status has been followed till the Finance At, 2007, as stated above. Therefore, the liability for payment of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellants provided consultancy services including computer consultancy services. As part of their business they prepared and laded on customers' computers custom- made software ( uncanned software ) and also sold computer software packages off the shelf ( canned software ). The canned software packages were of the ownership of companies / persons who had developed those software. The appellants were licensees with permission to sub-license those packages to others. The canned software programs were programs like Oracle, Lotus, Master Key, N-Export, Unigraphics, etc. The question raised in this appeal was whether the canned software sold by the appellants could be termed as goods and as such was assessable to sales tax under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... togive effect o the provisions or explains the changes proposed in the Finance Act, 2005. 7. Thus, admittedly as per the stand taken by the respondent themselves before the High Court of Madras, it is evident that activity of maintenance of computer software was exempt from the provisions of the Act prior to 2006. We are in agreement with the view taken by the High court of Madras. It is pertinent to mention here, that in the show cause notice itself no allegations of fraud collusion, misstatement or suppression of facts have been stated against the respondent, therefore, the demand is barred by limitation under Section 73 of the Finance Act, 1994 as well. For the aforementioned reasons, the substantial questions of law are answered in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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