Service Tax not applicable pre-change in levy regulations, Tribunal grants consequential relief.

The Tribunal held that Service Tax was not applicable to invoices issued before the change in levy regulations, even for services rendered after the change, due to obligations created earlier. The appeal was allowed, granting the appellants consequential relief as per the law.

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Issues:
1. Interpretation of Service Tax liability on resale of licensed information technology software.
2. Applicability of Service Tax on services rendered after a change in levy regulations.
3. Consideration of obligations created before and after the change in levy regulations.

Analysis:
1. The appeal was against an Order-in-Original passed by the Commissioner of Customs, Central Excise & Service Tax, Noida, regarding the levy of Service Tax on the resale of licensed information technology software. The appellants had contracts where invoices were raised before the imposition of Service Tax on Information Technology Software Services (ITSS) on 16/05/2008, but the services continued beyond this date. The Revenue contended that Service Tax was leviable on the part of the service rendered after 16/05/2008 for invoices issued before that date.

2. The Original Authority confirmed the demand for Service Tax and penalty, based on the provisions of Section 67 of the Finance Act, 1994, which covers services provided post the change in levy regulations. The appellant contested this decision, citing a precedent decision by the Tribunal in a similar case involving the transfer of technology services. The Tribunal in the precedent case had ruled that Service Tax was not leviable on the part of the service transferred before the change in levy regulations, even if part of the service was rendered after the change.

3. After hearing both parties and reviewing the contentions and the cited precedent case, the Tribunal found that the precedent case's findings were directly applicable to the present situation. The Tribunal noted that in the current case, contracts were finalized before 16/05/2008, and some services were rendered post this date based on obligations created before the change. Following the precedent case's decision, the Tribunal held that Service Tax was not applicable to invoices issued before 16/05/2008, even for services rendered after this date due to obligations created earlier. Consequently, the Tribunal allowed the appeal, granting the appellants any consequential relief as per the law.

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