TaxTMI 
TaxTMI 
2014 (6) TMI 594
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....like cricket scores etc. by the way of SMS. The Department was of the view that this service provided by the appellant to various telecom service providers during the period from 01/5/06 to 31/05/07 is 'business support service' taxable under Section 65 (105) (zzzq) readwith Section 65 (104c) of the Finance Act, 1994. The service tax demand of Rs. 53,02,577/- for the period from 01/05/06 to 31/05/07 is on this basis. 1.3 The second activity of the appellant in respect of which the service tax has been demanded is in respect of their joint venture with a foreign partner M/s Technology Aided Systems, Kuwait (TASK). The appellant entered into this joint venture with TASK to work together for smooth implementation of ACL Wireless Instant Messenger (WIM) application on M/s Mobile Telecommunication Company, Kuwaits (MTCs) network in its territory. In terms of the appellants agreement with TASK, they work together to implement ACL WIM application built on open internet standards for MTC's network in its territory. Out of total revenue generated from the use of the application from the subscribers of M/s MTC, M/s MTC retains 45% of the gross revenue and pays the remaining 55% to ACL (t....
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...., Delhi after issue of show cause notice passed an order-in-original dated 07/09/11 by which he confirmed the service tax demand of Rs. 1,40,23,819/- against the appellant alongwith interest thereon under Section 75 of the Finance Act, 1994 and beside this, while imposed penalty of equal amount on them under Section 78, imposed penalty of Rs. 5,000/- on them under Section 77 of the Finance Act, 1994. 1.7 Against the above order of the Commissioner, this appeal has been filed alongwith stay application. The miscellaneous applicant for early hearing of the stay application has been filed, as the department is pressing hard for recovery. The miscellaneous application for early hearing of the stay application is allowed. 2. Heard both the sides in respect of stay application. 3. Shri A.K. Batra, C.A., the learned Counsel for the appellant, pleaded that the service tax demand of Rs. 36,949/- in respect of repair and maintenance service is in respect of the services of maintenance of Versant software being used by the appellant and for which payment in foreign currency had been made to M/s Versant Corporation, Germany and similarly the Management Consultancy Service had been received ....
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....m, that in view of this, the service tax demand under business auxiliary service on the amount paid to TASK is without any basis, that as regards the service of Web hosting received from certain foreign service providers, this service is Information Technology Service covered by Section 65 (105) (zzzze) which became taxable only w.e.f. 16/05/08 and, hence, during the period of dispute i.e. during period from 01/05/06 to 31/03/08, the same was not taxable and it is totally wrong to charge service tax in respect of this service by treating the same as business support service. Shri Batra, therefore, pleaded that the impugned order is not sustainable and that appellant have a strong prima facie case in their favour. He, therefore, pleaded for waiver from requirement of pre-deposit for hearing of their appeal and stay on recovery thereof till the disposal of the appeal. 4. Shri Amresh Jain, the learned DR, opposed the stay application by reiterating the findings of the Commissioner in the impugned order. He pleaded that the supply of content including user generated contents like SMS through software to the Telecom Service Providers to enable the mobile telephone subscribers to receiv....
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....ived during period prior to 18/04/06 when there was no provision in the Finance Act, 1994 for charging service tax in respect of services received by a person in India from an offshore service provider, in view of the judgment of Hon'ble Bombay High Court in the case of Indian National Shipowners Association vs. Union of India (supra) these service tax demands would not be sustainable and thus in respect of these demands, the appellant have strong prima facie case in their favour. 7. As regards the service tax demand of Rs. 53,02,577/- in respect of supply of software content for use in telecommunication service, prima facie we are of prima facie view that this service had become taxable by inserting clause (zzzzb) in Section 65 (105) of the Finance Act, 1994 w.e.f. 01/06/07 and, therefore, for the period prior to 01/06/07 no service tax could be charged by treating this service as business support service. It is well settled law that when a new entry regarding taxation of a service is introduced in the Act from a particular date, it has to be presumed that during the period prior to introduction of the new entry, that service was not taxable. 8. As regards the service tax demand....
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....p; [(zzzze) service provided to any person, by any other person in relation to information technology software [*?*?*] including, - (i) development of information technology software, (ii) study, analysis, design and programming of information technology software, (iii) adaptation, upgradation, enhancement, implementation and other similar services related to information technology software, (iv) providing advice, consultancy and assistance on matters related to information technology software, including conducting feasibility studies on implementation of a system, specifications for a database design, guidance and assistance during the start-up phase of a new system, specifications to secure a database, advice on proprietary information technology software, (v) [providing] the right to use information technology software for commercial exploitation including right to reproduce, distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products, (vi) [providing] the right to use information technology softw....