TMI Blog2023 (1) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to take a fresh look at the facts that have not been subjected to detailed scrutiny for proximity to the several decisions cited by both sides - the impugned order is set aside in its entirety - direction to restore adjudication of show cause notice to the original authority with the direction that the judicial decisions and other submissions, if any, be disposed off after detailed consideration. Application disposed off. - SERVICE TAX APPEAL NO: 87277 OF 2017 AND SERVICE TAX APPLICATION (EH) 85406 OF 2020 WITH SERVICE TAX APPEAL NO: 87420 OF 2017 AND SERVICE TAX APPLICATION (EH) 85405 OF 2020 - FINAL ORDER NO: A / 85052-85053 /2023 - Dated:- 25-1-2023 - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Shri Prakash Shah, Advocate for the assessee-appellant Shri Anand Kumar, Additional Commissioner (AR) for Revenue ORDER M/s Persistent Systems Ltd and Revenue are in appeal against order-in-original no. PUN-SVTAX-000-COM-003-17-18 dated 29th May 2017 of Commissioner of Service Tax, Pune which disposed off show cause notice for recovery of tax of ₹45,21,49,333 for the period from 2011-12 to 2014-15 and, straddling, as it do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 2012-13, altered the narration in the books of accounts from service received to cost of technical professional demonstrative of intention to mislead. Furthermore, he contends that the clear distinction between the work undertaken on behalf of the appellant and that undertaken by the subsidiaries on their own account was within the knowledge of the appellant. It was also argued that the decision of the Tribunal in Board of Control for Cricket in India (BCCI) v. Commissioner of Service Tax-II, Mumbai [2018-TIOL-2641-CESTAT-MUM] stands against the bar of limitation adopted by the adjudicating authority and submitted that the availability of credit is contingent only upon payment of tax by the assessee as deemed recipient of service. It was pointed out by him that the decisions relied upon by the adjudicating authority had not taken note of the decision of a Larger Bench of the Tribunal in Jay Yushin Ltd v. Commissioner of Central Excise, New Delhi [2000 (119) ELT 718 (Tribunal-LB)] and, thus, lacks value as precedent. Submitting that section 66A of Finance Act, 1994 would be rendered otiose if person liable to pay tax takes this plea, he sought setting aside of the droppin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s State of Andhra Pradesh - [2004 (178) ELT 22 (SC)], in support of their contentions. They have also cited proviso to Rule 4(1) of POPS Rules 2012 which prescribes Place of Provision at the location of the goods at the time of provision of service when provided remotely by electronic means. From the fact of the case it is seen that subsidiaries only gets remote access for providing part of services at the place of customers of PSL. PSL engages foreign subsidiaries for rendering clusters of services onsite by remote access. The noticee is not having any proof as to how the software in respect of which subsidiaries provides services possesses attributes of goods as per TCS judgment. Moreover, service tax is levied on information technology software services w.e.f 16.05.2008 and in the negative list regime it is placed under declared list of service. The constitutional validity of IT software service has been upheld by Hon'ble Madras High Court in the case of InfoTech Software Dealers association - [2010(20) STR 289(MAD)] wherein it was emphasized that nature of transaction and imposition of tax would depend upon dominant intention of the contracting parties. Whether it is sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no agreement between subsidiaries and clients of PSL. Subsidiaries are not issuing any bills/invoices to such clients of PSL. Thus, it is PSL located in taxable territory who is the legal recipient of the service and therefore obliged to make payments for the onsite services rendered by their subsidiaries. in the impugned order went on to erroneously hold that 28. In view of the above, I hold that information technology software services provided by the subsidiaries are received by the PSL in the taxable territory. I further hold that such taxable services received from outside India, is chargeable to Service Tax as per Section 66A of the Finance Act, 1994 read with Rule 3 (iii) of Taxation of Services (Provided from outside India and received in India) Rules, 2006 till 30-06- 2012, and thereafter in terms of Section 66C of the Act ibid read with Rule 3 of the Place of Provision of Service Rules 2012. PSL being recipient of taxable service in India is the person liable for payment of Service Tax under RCM on the gross amount charged by such foreign subsidiaries in terms of Rule 2(l)(d)(iv) of Service Tax Rules, 1994 and Rule 2(l}(d)(i){G) of the Rules ibid as these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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