TaxTMI 
TaxTMI 
2011 (1) TMI 642
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....ion Centres at 12 places. (II) Billing as detailed below : (i) Backend Accounting (ii) Backend Accounting (Stationary) (iii) HT Billing (iv) Spot Billing (v) Balasore, Spot Billing (vi) Soro Spot Billing (vii) Beraampur Spot billing (viii)Sambalpur, Spot Billing (ix) Energy Auditing (III) Software maintenance as detailed below. (i) e-Care Software Maintenance (ii) BMS Software Maintenance (iii) Website Maintenance (iv) Cat Database Maintenance (v) Consumer Indexing (vi) Watch 86 Ward Route Riders 3. After verification of the records recovered and recording the statements and further scrutiny of the records, department took a view that the activity of the appellant in providing services such as Electricity Call Centre, Customer Service Centre, Computerized Collection Centre, Energy Audit, Consumer Indexing, Watch & Ward Route Riders etc., fall in the category of Business Auxiliary Service and liable to levy of Service Tax and consequently the proceedings were initiated. Af....
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....Audit This service does not fit into Business Auxiliary Service or any other taxable service. Hence, rendering of this service is outside the purview of service tax law 6,258 126 335 5. BMS Software maintenance, e-Care maintenance, Maintenance of software website e-Care Maintenance and Website Maintenance is development of software and are outside the purview of Service Tax as the Finance Act, 2008 (16-5-2008) has brought in a new service category called "Information Technology Service" in section 65(15)(zzze) levying Service Tax on development of software In any case, maintenance of software cannot be taxed under 'Management maintenance or repair service' prior to 1-6-2007, on which date an Explanation was added considering software as goods to the definition from 1.6.2007. Hence, BMS Maintenance was not liable during the disputed period 2,21,889 4,442 5,808 6. Consumer Indexing This activity is development of GIS software and other IT service and hence is outside the purview of Service Tax as the Finance Act, 2008 has imposed Service Tax on development of software from 16-5-2008 as stated supra. Hence, no liability arises during the dispu....
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.... be made. 7. On the other hand, the learned Jt. CDR submits that the show-cause notice, nowhere admitted that the services rendered by them amounted to call centre service. There is no dispute and the department does not dispute even now that the call centre service was exempt up to 1-3-2006. The question is whether the service rendered by them was call centre service. In fact, Shri G.S. Murali Krishna, Managing Director of the appellant in his statement itself admits that most of the activities of the Customer Service Centre relates to the call centre activity and Customer Service Centre and Computerized Collection Centre component in the total call centre activity is 27 per cent only. This itself shows that the claim of the appellant that the service rendered by them was call centre and the same was exempt prior to 1-3-2006, fails. He submits that this claim is also not acceptable in view of the fact that the service rendered by the appellant cannot be called as call centre service at all. 8. We do not find substance in the claim that show-cause notice has travelled beyond the scope. The show-cause notice only makes a statement of fact that call centre service was exempt ti....
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....akes any activities relating to such sale or purchase of such goods or services; SSBC : "support services of business or commerce" means service provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship, management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation.-For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security." First item is the service rendered by the appellant in Electricity Call Centre, Customer Service Centre, and Computerized Collection Centre. The claim of the appellant is that this was nothing but call centre service, whereas the department has class....
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.... or information through telephone on behalf of another person whereas one of the activities covered by Business Auxiliary Service is provision of service on behalf of the client and service incidental to that service. When we look at the agreement between the companies in this case, role of call centre is to receive complaints, record the nature of the complaints, date and time of complaint. Call centre is required to help maintain a database of telephone numbers of Fuse off call centre/distribution section offices/sub-division offices/division offices/circle offices etc., and the complaints are required to be referred to concerned persons. The software is required to help in monitoring of complaints till the same are resolved. In this case, it can be seen that the nature of work performed by the so called electricity call centres, can be said to be registration of complaint on behalf of the electricity board and monitoring of the same till the complaints are resolved. The Electricity Call Centre is a place of generation of report indicating the details of the complaints received and resolved. When we look at the nature of services, it is covered by clause (vi) under the definition....
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....e noted that SSBC is the service provided in relation to business or commerce whereas Business Auxiliary Service is service provided on behalf of the client. Therefore, what is required to be seen is whether the services are provided to the customer or to electricity company/department. When complaints are registered and amounts are collected, in reality, the appellant is acting on behalf of the electricity company/department as far as the customers are concerned, having a direct interaction with the customer. In case of SSBC, that would not be the case. The interaction would be between the service receiver and service provider and the customer would not be dealing with the service provider at all. Once the appellants deal with the customer, he is acting on behalf of the electricity company/department and therefore classification of services provided by the appellant is appropriately to be classified under Business Auxiliary Service and not under SSBC. 13. The next service under dispute is software maintenance. The learned Commissioner in impugned order has held that e-Care maintenance, website maintenance and database maintenance are all maintenance contracts for the software u....
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....-2008, by way of Explanation in sub-clause (ii) of section 65(19), Explanation cannot be considered to have been clarificatory or declaratory so as to have retrospective effect. The Apex Court observed there is no other option to hold that by inserting the Explanation appended clause 19 of section 65 of the Act, new concept of imposition of tax has been brought in. The Parliament may be entitled to do so. It would be entitled to raise a legal fiction, but when a new type of tax is introduced or a new concept of tax is introduced so as to widen the net, it, in our opinion, should not be construed to have a retrospective operation on the premise that it is clarificatory or declaratory in nature. There is no doubt this clarification widen the scope of taxation of service." In any case, the appellants themselves have submitted that the liability can arise after 1-6-2007, Therefore, in view of the ratio of the decision in the case of Martin Lottery Agencies Ltd. (supra), we consider that it would not be appropriate to apply the Explanation retrospectively and levy Service Tax with effect from 9-7-2004. In any case, the very fact that Explanation has been added to clarify doubts, would s....
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....r all services processing/generation of prescribed outputs, as detailed below. (i) Hand Held computers shall be provided to Meter Readers on 34d/4th uploading the consumer data for issue of bills on the spot. (ii) The spot billing work shall be completed by 18th. (iii) When spot billing is over for each section, the data is to be downloaded for all the service finally." 17. In case of agreement between the Central Power Distribution Company of Andhra Pradesh for operation and maintenance of HT billing system also, the work to be performed is similar. It is also seen that agreement between the appellant and Northern Orissa for spot billing activity also has similar provision. In all these cases, the billing and accounting is not done on behalf of electricity companies/departments but is for them. There is no interaction/communication with the customers. The meter readings are required to be provided by the electricity department and these are to be entered into computer and data generated. Further, bills are required to be generated. According to the definition of SSBC, services provided in relation to the business or commerce, including ac....
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.... the details of transformer net work etc. The learned Commissioner has observed that this item of work has a lot of physical activities like identifying the transformers connected to feeders, identifying the poles to be connected to distribution transformers, identifying customers, making inventory, painting identifying marks and numbers on these transformers and poles etc. She has also observed that IT component of the job is not significant. However, the learned Advocate appearing for the appellant submitted that this is IT service and he relied upon the circular issued by the Board to submit that development of software would fall under IT service. In this activity, development of software is only facilitating consumer indexing and it cannot be said that other activities are incidental or ancillary. For classification purpose, we have to look into the essential character of the service and in this case, development of software only facilitated the consumer indexing and real work is physical in nature as observed by learned Commissioner. In this case, we find that the reliance of the learned Jt. CDR on the decision of the Tribunal in the case of CCE v. Deloitte Tax Services (Indi....
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.... no longer relevant in view of decision of Hon'ble High Court of Gujarat in the case of CCE v. Neminath Fabrics (P.) Ltd. 2010 (256) ELT 369. In this case, even on 3-3-2006, when the appellant made application, they applied for registration initially under Business Auxiliary Service and subsequently under SSBC. It was the claim of the appellant that they were under the impression that call centres were exempted prior to 1-3-2006 and therefore, the appellant had not applied for registration. However, in this case, there are as many as 14 agreements of various electricity companies/departments with the appellant. The agreements are for various items of work such as Electricity Call Centre, Customer Service Centre, Spot billing, consumer indexing, e-care maintenance, website maintenance, energy audit, Watch and ward route rider, Computerized Collection Centre, billing and accounting, CAT data base maintenance etc. That being the position, the claim of the appellant that they believed that service provided by them was call centre and therefore had bona fide belief that they were not liable to pay service tax, cannot be accepted. It is a statutory obligation on the part of every service....