TaxTMI 
TaxTMI 
2013 (6) TMI 167
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....arious banks. The scope of their activity as ascertained by the department based on statement of the Managing Director of the company as seen from the impugned order is as under :- A statement was recorded from Mr. Nagaraj V. Mylandla on March 27,2006 Managing Director of FSS, who interalia stated that FSS was started in February, 1991 as a private limited company and is engaged in the activities of software development, software sales and software related activities such as customization, fixes, upgrades and new releases and the said software is banking related for transaction process like BASE24, Prognosis, Golden Gate, DCMS, MAPS, RECON, etc. BASE24 is a customized software developed by ACI Worldwide Inc and sold by FSS. They further ....
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.... the period 9.7.2004 to 30.4.2004. 2. They were also doing services, known as ATM service under which, they were certifying the security and reliability of the software used by Automated Teller Machines (ATM). They did not pay service tax on such services either for the period from 1.7.2003 to 30.4.2006. 3. Revenue was of the view that appellants were liable to pay service tax on maintenance of software under the category Management Maintenance or Repair Service [section 65 (105)(zzg) and section 65 (64) of Finance Act, 1994] and services rendered in relation to ATMs under the category Technical inspection and certification Services [section 65 (105) (zzi) and section 65 (108) of Finance Act 199$] for periods as mentioned above and is....
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.... (b) properties includes information technology software; 5. The Ld. counsel for the appellant submits that prior to 1-5-2006, software was never considered as goods and its maintenance was never considered to be covered by the scope of entry under section 65 (64). However, when the Hon'ble Apex Court gave the decision in the case of TATA Consultancy Services Vs Union of India 2004 (178) ELT 22 (SC). Revenue started interpreting that software also is goods. The said decision of the Hon'ble Apex Court was on the question whether sales tax was payable on software sold in canned form and the Apex Court gave a ruling that sale of software available off the shelf also known as canned software could be considered as goods. Thereafter, CBEC ....
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....en there was a conscious intent to keep the services of the type rendered by appellant outside the scope of service tax as seen from Explanation, which was in force in section 65 (19) of Finance Act, 1994 during the relevant time, it is not reasonable to demand service tax from the appellant giving a new interpretation with retrospective effect to the word goods used in the definition of the service for Management Maintenance or Repair Service to levy tax thereon. 6. She points out that the Tribunal has already decided that during the relevant period maintenance of software should not be subjected to service tax and she relied on the following decisions :- 1) Kasturi& Sons Ltd. Vs UOI 2011 (220) STR 129 (Mad.) &n....
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....and certification; 65 (108) technical inspection and certification means inspection or examination of goods or [process or material or information technology software] or any immovable property to certify that such goods or [process or material or information technology software] or immovable property qualifies or maintains the specified standards, including functionality or utility or quality or safety or any other characteristic or parameters, but does not include any service in relation to inspection and certification of pollution levels; It is very clear that the certification of the services also would be covered during the relevant time. The amendment made in 2006 brought in more aspects of services relating to ATM ....
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....at extended period of time cannot be invoked for demanding tax short paid in respect of this matter. Therefore, their appeal in the matter of this issue is rejected. 11. Now the penalties imposed by the impugned order are to be considered. There is a penalty of Rs. 1000/- imposed under section 77 of Finance Act, 1994 for having not taken license under the required category of service. Further there are penalties of Rs. 100 per day up to 18-04-2006 and Rs. 200 per day from 18-04-06 or 2% of the service tax amount as detailed in the operating clause (6) of order part of the impugned order. Further a penalty of Rs. Two crores is imposed under section 78. Now that it is held that the demand is maintainable only for Rs. 6,99,553/-, there is d....