TaxTMI 
TaxTMI 
2014 (1) TMI 1602
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....rging service tax on this activity under 'Business Auxiliary Services (BAS). With regard to computerised data processing services they have been discharging service tax on the said activity w.e.f. 01/05/2010 under Business Support Services (BSS). These facts were intimated to the department by the appellant vide letter dated 20/10/2003. On 23/10/2008 the department issued a show cause notice to the appellant for the period July, 2003 to March, 2004 in respect of computerised data processing services undertaken by them under the category of BAS as defined under Section 65(19)(iv) of the Finance Act. 1994 and demanded a sum of Rs.14,90,73,095/- towards service tax under Section 73 of the Finance Act, 1994 along with interest thereon apart from penalties under the said Finance Act. In the show cause notice, it was alleged that the appellant are engaged in collection of documents and processing the same and the said activity is incidental or auxiliary to the customer care service provided by the clients to their customers and, therefore, the activities undertaken by them is appropriately classifiable as an incidental or auxiliary support service such as billing, collection or recovery ....
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....transactions processing which are specifically included in the definition of BSS. This is also evident from the fact that when BSS was introduced under the tax net w.e.f. 01/05/2006, computerised data processing was deleted from the exclusion clause of BAS. Since BSS was brought under tax net w.e.f. 01/05/2006 and the appellant's activity is covered by the same entry, in view of the decision of the hon'ble High Court in the case of Indian National Ship Owner's Association vs. Union of India 2009 (14) STR 289, the same stands excluded from the earlier entries. He also relies on the decision of the Tribunal in the case of Phoenix IT Solutions 2011 (22) STR 400 (Tri.Bang.) and Gandhi & Gandhi Chartered Accountants vs. Commissioner of Central Excise 2010 (17) STR 25 in support of the above contention and the department's appeal against the same before the apex Court was dismissed as reported in 2011 (23) STR J 94(SC). 3.3 Alternatively, he submits that since the service had been provided to foreign clients and service tax is a destination based consumption tax and is not applicable to export of service, question of payment of service tax would not arise as the appellant's services h....
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....Pay-roll processing, accounts management, etc. even by using computer programmes cannot be termed as activities primarily in relation to computer systems. The use of computer in these services is secondary and the primary activity is that of business related work and therefore, these services would be taxable under BAS'. In view of the above, the transaction undertaken by the appellant transaction processing and since it is not a service primarily in relation to computer system, the activity would be covered under BAS and, therefore, he submits that the appellant is liable to service tax. 4.1 The learned Commissioner (AR) also relies on the decision of the Hon'ble apex Court in the case of Hotel Leela Venture Ltd. vs. Commissioner of Customs (Gen.), Mumbai 2009 (234) ELT 289 (SC) wherein it has been held that the exemption notification has to be read in a strict sense and the burden is on the person claiming the benefit of exemption to prove that they are eligible for exemption. It is, therefore, the responsibility of the appellant to show that they are excluded from the scope of the tax which the appellant has not discharged in the present case. Accordingly, it is submitted tha....
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....nking transactions. 5.3 The reliance placed by the Revenue on the Circular NO. B3/7/2003-TRU dated 21/08/2003 is also incorrect. The explanation to BAS reads as follows: "Explanation- For the removal doubts, it is hereby declared that for the purposes of this clause "information technology service" means any service in relation to designing, developing or maintaining of computer software, or computerised data processing or system networking, or any other service primarily in relation to operation of computer systems." After the words 'system networking', there is a 'punctuation' mark and thereafter 'or any other service primarily in relation operation of computer systems' follows. In view of the punctuation mark after the words 'system networking', the words 'primarily in relation to operation of computer systems' applies only to "any other services" and not in respect of the services specifically delineated in the said explanation such as designing, developing, maintaining of the computer software or computerised data processing or system networking. The insertion of a ',' has not been taken note of while issuing the ....