TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 168
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....to as Acquire) has preferred Service tax Appeal No. 841 of 2010 against the adjudication order dated 30.03.2010 passed by the same adjudication Authority- the Commissioner (Adjudication), Central Excise, New Delhi. Revenue has preferred Service tax Appeal No. 946 of 2010 against the later adjudication order. 4. In Appeal Nos. 841 and 946 of 2010, preferred by the assessee M/s Galileo and by Revenue, applications were filed by the assessee seeking alteration of its name and description, consequent on change of name of the company. These applications were ordered on 24.04.2014. Hence the assessee in these appeals is M/s Acquire Services Pvt. Limited (Acquire). 5. Amadeus India Pvt. Ltd. and Acquire Services Pvt. Ltd., are hereinafter referred to as assessees 6. M/s Amadeus Appeals: (a) Amadeus is a company registered under the Companies Act, 1956. Its application, to establish itself as a 100 percent Export Oriented Unit (EOU) under the Software Technology Parks of India (STP), was accepted in July 1995 and permission was granted to undertake export of its entire production of computer software. In July, 2000, STP issued a clarification to Customs Authorities certifying that the ....
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....e database but does not touch the process by which such information is brought on to the host computer. 35. The assessee which occupies a position mid-way between the two fulfils, it will be clear from the facts stated above, the functions of a programme exporter. It does not add mere entries to the database as done by the travel agent. In fact it has no direct interest in adding to, or drawing extracts from the database built into the computer like the several operators all the world over. What it does actually is to supplement, the functions of the Amadeus Group by preparing and transmitting programmes to the latter for incorporation into portions of "partitions" in its mega-computer at Erding in Germany, so as to enable the travel agents in its marketing region draw on the available information for their benefit. Its activities are to issue instructions to the master-computer to recognise the operators, identify them and provide them access to specific portions of the database. There can be no doubt whatever, for the reasons discussed above, that the assessee manufacturers, produces and exports software within the meaning of the three specified sections of the Act. It is open t....
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.... Section 78 was liable to be assessed; that the demand pertaining to and covered by the extended period and penalty under Section 78 was wrongly deleted by the adjudicating Authority. " 7. M/s Acquire Appeals: (a) Proceedings were initiated against Galileo (now Acquire, the assessee) by DGCEI, on the premise that the agreement dated 24.02.2005 between M/s Galileo International Partnership (a U.S. entity) and Interglobe Enterprises Pvt. Limited reveals that this assessee was marketing and distributing Galileo International Partnership systems/products; that Interglobe was authorised (under the agreement dated 24.02.2005) to commercially exploit and globally distribute, particularly in India, the software, hardware, intellectual property rights and other properties relating to M/s Galileo International Partnership, USA pertaining to the Galileo systems, CRS (Computer Reservation System) services and services/facilities; that M/s Interglobe had established a separate Indian Company (the assessee); that activities of the assessee amounted to rendition of BAS; and the assessee was thus liable to service tax under Section 65(19)(ii) of the Act. (b) In June 2005, statement of the Manag....
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....on 75 but granted cum tax benefit, treating the gross value received by the assessee during the period, April 2007 to March 2008 (the normal period) as inclusive of the service tax payable. The demand confirmed by the impugned order was thus scaled down to Rs. 2,56,05,183/- apart from interest and penalties. (e) Aggrieved by the deletion of demand for the whole period, including the extended period and by deletion of penalties under section 78 of the Act, Revenue has preferred Service tax Appeal No. 946 of 2010. 8. Generic Analysis: The assessees are Indian Companies and are 100% EOU's registered with STP and were granted exemption under Section 10A/80HHE of the Income Tax Act, 1961 for export of computer software. Assessees are treated for purposes of the Income Tax Act as exporters of computer software, involved in data processing, receiving payment from foreign entities in convertible foreign exchange. Receipt of consideration (by assessees for rendition of services) from the foreign entities in convertible foreign exchange, is also recorded in the impugned adjudication orders. Amadeus and Galileo Group of Companies (the foreign entities) evolved and maintain a computer r....
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....TA No. 4616(Del) 98. Though this conclusion is recorded in the context of relevant provisions of the Income Tax Act (which were in issue in that appeal), the conclusion is recorded after detailed and critical examination of the transactional facts; and this conclusion as to the activities of this assessee (which are in pari materia the activities of the other assessee - Acquire) represent an accurate description of the activities and role of the assessees herein, relevant to these appeals as well. We are in respectful agreement with these conclusions recorded by ITAT. 10. Under the schemes and protocols of the interconnected operations, it is the overseas entities - Amadeus and Galileo, which conceived, evolved, maintain and process the worldwide travel related information through mega computers located overseas. CRS is a system connected with a data base carrying various kinds of information pertaining to several airlines and other travel services providers, is used for booking airlines tickets, cabs, hotels and like travel facilities, across the globe. Airlines, hotels, cab agencies and other services providers pay fee to the overseas entities (Amadeus or Galileo) for bookings m....
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.... time a travel agent records any travel related booking through the assessees, the same is measured in terms of segments; and that assessees are placed midway between two fulfilled functions of a programme exporter and their operations amount to more than mere insertions in the database and include validation, correction and processing functions with respect to data so entered amounting to computer data processing. Further contended that as STP units they are claiming benefits under Section 80HHE/Section 10A of the Income Tax Act, 1961 towards export of information technology services, a claim that was confirmed by the ITAT in Asst. CIT v. Amadeus India (P.) Ltd. [2001] 79 ITD 407 (Delhi), a decision which is equally applicable to the other assessee - Acquire. On this basis assessees contended that their activities amount to "data processing", which is excluded from the purview of "BAS" vide the Explanation to 65(19), until substitution of a new definition to BAS w.e.f. 01.05.2005. After the amendment, assessee applied for registration for providing BAS and this was granted, to Acquire. Assessees also contended that activities/services undertaken by them were exported to the fore....
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....ed to a person located outside India; the service should be for use in relation to business or commerce; the service should be delivered/used outside India; and (d) the payment for the service should be received in convertible foreign exchange. Since all these tests are satisfied in respect of services provided by the assessees to the overseas entities, there is no liability to tax; (e) Services provided for which payment is received in convertible foreign exchange was exempted by Notification No. 6/1999-ST dated 09.04.1999. This Notification was rescinded by Notification NO.2/2003-ST dated 01.07.2003. The exemption was however subsequently reinstated under Notification No. 21/2003-ST dated 20.11.2003, followed thereafter by the 2005 Rules. However, there was no tax liability on a service provided to an overseas recipient (even during 01.07.2003 till the 2005 Rules), in view of Board Circular No. 56/5/2003- ST dated 25.04.2003-ST, which clarified the status of export of services, in view of apprehensions expressed by the trade, consequent on withdrawal of Notification No. 6/1999-ST. The Board clarified that service tax being a destination based consumption tax is not applicable to....
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....tions 76 and 77 of the Act. 16. These submissions reiterate submissions made and defences pleaded in the adjudication proceedings. Hence those are not dilated upon. 17. Written Submissions on behalf of Revenue: (a) Services provided by assessees amount to BAS, falling under Section 65(19), sub-clauses (ii), (iii) and (vii). (b) For entitlement to benefits under the 2005 Rules, the recipient should be located abroad and should use the service abroad. Where however there are multiple recipients some of whom are located abroad (like the foreign entities who maintain the CRS systems) and other recipients are located in India (such as the travel agents and the ultimate consumers), the benefit of the Export of Service Rules, 2005 is inapplicable. (e) Since assessees failed to promptly and voluntarily furnish the relevant information regarding the nature of activities/services provided and the consideration received for the same, periodically, this conduct amounts to suppression of material facts. Hence, invocation of the extended period is legitimate. The impugned orders to the extent demand of Service Tax for the extended period and imposition of penalty under Section 78 is dropped....
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.... is excluded from the purview of BAS. During the relevant period i.e. 01.07.2003 to 01.05.2006 "Computer Data Processing" enacted as part of the inclusive definition of Information Technology Service, was excluded from the purview of BAS. 21. The assessees provided services amounting to marketing of CRS, conceived, developed and owned by overseas entities, in India, by employing computer processes amounting to data processing. This the assessees did by processing information/data generated by their accredited travel agents in India and uploading the same to overseas located computer systems, which maintain and process the master data of the overseas entities. Assessees also identify and provide access to relevant segments of travel related data in the CRS to local travel agents by acting as an interface with the overseas computer systems and the composite data maintained and processed therein, by computer data processing. 22. In our considered view services provided by assessees to the overseas entities (Amadeus/Galileo) clearly amount to promotion or marketing of CRS services of the overseas entities (a BAS), but nevertheless falls outside the ambit of BAS as defined, since thes....