2014 (5) TMI 1020

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....ispute   2006-07 to 2009-10 2010-11   2   Demand of Service Tax Rs.1,72,92,730/-   Rs.68,74,335/- 3   Penalty   Rs.1,72,92,730/-   u/s 78 Rs.5000 u/s 77(2) and u/s 76. 4   Interest unquantified - - 5   Amount already paid Rs.14,31,136/-   Rs.4,21,577/-       Facts The Appellant is established as 100% EOU and registered with the Director, STPI, Hyderabad, for export of software. They provide back office services and customer care services to M/s. Bank of America, NA and Bank of America Securities, LLC, both are situated in the United States of America. The appellant is register....

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..... 2. In respect of Maintenance/Management/repair Service, the contract entered into with Dimension Data Network Service (DDNS) by the Principal M/s. Bank of America NA is predominantly for supply of goods, though there is minor element of service. The benefit of this agreement accrues to the appellant, as it is a group company of Bank of America, NA. The respondent has held that the appellant is not a party to this agreement. Besides, demand of tax has been confirmed on the entire sum without excluding goods portion. The value of goods requires to be quantified by the lower authorities based on the evidence produced by the appellant. The demand on this count is Rs.60, 46,358/- + 42, 32,206/- (Total: Rs. 1, 02, 78,564/-). 3. On the res....

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....e appellants had informed the company abroad that they would not require any services but only need supply of goods. 3. Ongoing through the agreements and invoices, we found that according to the agreement there is a provision which provides for payment for unscheduled maintenance charges as submitted by the learned AR. We also find that the agreement produced before us is between Bank of America and DDNS. We also found that the claim that agreement provided only for supply of goods is not supported by any of the specific clauses in the agreement. On the other hand, Clause 34 of the agreement provides for maintenance services. In any case, the agreement is not between the appellant and the foreign company but between Bank of America and ....

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....ld at least deposit Rs.50 lakhs. 5. The observations made above would show that in this case, both Revenue as well as the appellants have not segregated the amounts received towards service and supply of goods and quantified the demand correctly. That being the position, the matter in any case has to be remanded. At the same time, it would be unfair to the Revenue if the remand order is passed without requiring appellants to make any pre-deposit especially in view of the fact that they have made a claim that entire amount relates to supply of goods which does not seem to be based on facts. In view of the above, while we consider it appropriate and in the interest of both the sides that the matter should be remanded at this stage itself r....