TaxTMI 
TaxTMI 
2014 (8) TMI 590
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....; We have carefully considered the submissions made by both the sides. We have also perused the impugned order. From the impugned order, it does not come out clearly how the service tax liability has been computed. If the appellant has purchased from third parties and sold the same on payment of VAT and also supplied hardware on payment of VAT, the same would not be liable to service tax. The liability to service tax would arise only in respect of software which the appellant has developed as per customer's specifications and supplied to their customers. Therefore, there is a need to go through the agreements entered into with the clients, bills raised for the services rendered and the goods supplied and the payments made towards service tax liability under the category of "information technology service". Only after going through all these documents, correct service tax determination can be done. Accordingly, we remand the matter back to the adjudicating authority to consider the matter fresh after taking into account all the documentary evidences which the appellant would submit in support of their claim that they have discharged the service tax liability correctl....
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....ware is also used by all class of buyer and they sell the software on payment of VAT. The third set of service undertaken by them is sale of hardware, such as, computers and servers purchased from hardware manufacturers on payment of excise duty/VAT and resell them as such again on payment of VAT. It is his contention that the activity undertaken by the appellant is trading in software/hardware products and therefore, cannot be levied to service tax under "Information Technology Service" or "Intellectual Property Rights Service" or under any other category. 3.2 As regards the classification proposed under "Intellectual Property Rights Service" for the period prior to 16/05/2008, the learned Counsel submits that when the sale is effected of a software, it can be of a copy of a software or it can be by way of sale of a copy right in a software. When a copy of the software is sold, it is only a sale of goods. Only when the copy right in a software is transferred, it would come under the category of intellectual property rights. However, "Intellectual Property Rights Service" as defined at the relevant point of time did not include in its scope 'copy right' and therefore, classi....
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....ltant further submitted that balance service tax demand pertains to receipts such as, reimbursement of Octroi charges, etc, and these are not taxable to service tax. Accordingly, he pleads for grant of stay. 4. The learned Commissioner (AR) appearing for the Revenue, while reiterating the findings of the adjudicating authority, submits that in the present case, the sale of third party software or software developed by the appellant in-house do not amount to sale of goods inasmuch as there is no transfer of source code and object code. In the absence of such a transfer, supply of software cannot be considered as a sale. Therefore, they will come within the purview of service activity and therefore, the impugned demands are sustainable. As regards the variation between the proposal contained in the show-cause notice and the classification of services in the impugned order, he submits that such variation is permissible, as any error made in the classification of the service in the notice would not vitiate the notice. So long as the service is correctly classified in the adjudication order, the same would suffice. He also submits that the assessee is operating under a self assessmen....
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.... under the category of IPR services. The IPR services as it stood at the relevant time specifically excluded 'copy right' from its purview. Computer software is a literary work as defined in sections 2(ffc) read with section 2(o) of the Copy right Act, 1957. Since copyright stood excluded from the IPR Services, the supply of software cannot come under the said service. Further the Hon'ble Apex Court in the case of Tata Consultancy Service Ltd. (supra) had held that there is a difference between the sale of copy of a software and sale of copy right in a software. In the facts of the case before us, it is seen that what is involved is sale of a copy of a software and there is no transfer of copy rights. Therefore, the transaction involved is one of sale of goods. On this ground also, the impugned demands do not appear to be sustainable in law either under IPR services or under Information Technology Service. The fact of purchase and resale of software and payment of VAT/ST on the software also point to the fact that the transaction entailed 'sale of goods' and not supply of services. Similarly, sale of hardware would be clearly a trading activity. Therefore, this is also ....