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TMI Blog2023 (6) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... lifies as capital expenditure the appellant accounted the same as capital expenditure and shown the same expenditure under capital heads in their financial reports of the year 2006-2007, 2007 -2008 and 2008 -2009. The audit was conducted by the officers of the central excise wherein it was pointed out that appellant has received ERP related services from two service provider situated outside India and accordingly, appellant was liable to pay service tax under Section 66A. As per the audit officers the appellant had paid total amount of Rs. 2,21,73,200/- to M/s. CIBA Switzerland and BASF, South East Asia Singapore during the period from June 2006 to March, 2008 towards ERP system related services which should have been taxed under the category of Management or Business Consultant Service" and further paid amount of Rs. 2,90,65,606/- during the period from June 2006 to April, 2010 towards ERP system related service should be taxable under the category of "Information Technology Software Service". The appellant paid service tax of 23,81,235/- under the category of "Information Technology Software Service" along with interest of Rs 1,44,179/- on 22.10.2010 on total value of Rs 2,47,35, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement and Business Consultant Service" for the period up to 16.05.2008 and under the category of "Information Technology Software Service" for the period post 16.05.2008. It is his submission that the appellant have discharged the applicable service tax under the category of "Information Technology Software Service" in respect of all the payment made by it post 16.05.2008 along with applicable interest for the delay in payment of tax. 2.1 He further submits that as regard the payment made by the appellant prior to 16.05.2008 since no liability for payment of service tax could arise under the category of "Information Technology Software Service" as the same was introduced with effect from 16.05.2008 the ld. Commissioner has erroneously confirmed the demand for the service tax under the category of management and business consultant service. 2.2 He, without prejudice, to his above submission further submits that arrangement in the present case is for sharing of costs and not for provision of service and hence, no liability of service tax could arise. He placed reliance on the following judgments:- * Intercontinental Consultants & Technocrafts Pvt. Ltd - 2013 (29) STR 9 (Del.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance on the following judgment:- * Secretary, Town Hall Committee vs. CCE, Mysore - 2007 (8) STR 170 (Tri.Bang) * K.K. Appachan vs. CCE , Palakkad - 2007 (7) STR 230 (Tri. Bang.) * Continental Foundation Jt. Venture vs. CCE, Chandigarh - I- 2007(216) ELT 177 ( SC) * CCE, Mumbai IV vs. Damnet Chemicals Pvt. Ltd - 2007 (216) ELT 3 (SC) 2.7 Alternatively he submits that in any case the entire issue is revenue neutral as the appellant are in position to avail the cenvat credit of service tax paid on the services received from the overseas service provider. In this regard he placed reliance on the judgments :- * Amco Batteries Ltd. Vs CCE, 2003 (153) ELT 7 (SC) * International Auto Ltd. Vs CCE, 2005 (183) ELT 239 (SC) * CCE Vs Narayan Polyplast Ltd., 2005 (179) ELT 20 (SC) * CCE VS Narmada Chematur Pharma, 2005 (179) ELT 276 (SC) * CCE VS. Textile Corporation,2008 (231) ELT 195 (SC) * CCE VS. Jamshedpur Beverages, 2007 (214) ELT 321 (SC) * CCE VS. Coca Cola India (Pvt.) Ltd 2007 (213) ELT 490 (SC) * Alembic Vs CCE, 2007 (218) E.L.T. 607 * CCE VS Indeos Abs Ltd., 2010 (254) ELT 628 (Guj) 2.8 He further submits that penalties in the present case are not imposa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulting engineering services‟ in the definition itself. Once a particular service is excluded from the scope of service tax where it normally is supposed to fall then it cannot be taxed under some other category. This principle has been followed in the case laws of Federal Bank. Ltd. and also Lal Pathlabs Ludhiana, Collection Centre cases which have been cited earlier. However, w.e.f. 16-5-2008, information technology service was introduced. The definition of information technology service is "any service provided or to be provided to any person in relation to information technology software for use in the course, or furtherance, of business or commerce, including. (i) development of information technology software, (ii) study, analysis, design and programming of information technology software, (iii) adaptation, up gradation, enhancement, implementation and other similar services related to information technology software, (iv) providing advice, consultancy and assistance on matters related to information technology software, including conducting feasibility studies on the implementation of a system, specifications for a database design guidance and assistance d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the new service itself shows that since the same was not taxable under the existing entry prior to its introduction the same was not taxable prior to its introduction, for this reason also the revenue itself admitted that very same service of ERP implementation is classifiable under "Information Technology Software Service" w.e.f 16.05.2008 and the same was not taxable prior to this date under management or business consultant service, for this reason also the demand for the period prior to 16.05.2008 is not maintainable. 4.1 As regard the service tax liability for the period from 16.05.2008, the same has been discharged by the appellant along with interest. Hence, the same is maintained. Since the issue involved is of pure interpretational nature no mala-fide can be attributed to the appellant for non-payment or short payment of service tax, moreover, there is force in argument of the learned counsel that since the appellant was entitled for cenvat credit of the service tax demanded, entire issue is revenue neutral. Considering this undisputed fact and overall facts and circumstance of the case we are of the view that the appellant has made out a strong case for wavier of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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