TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 169
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....it is the service rendered to any person by any other person in relation to the same and when a person provides 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 component for the creation of and inclusion in other information technology software products. It is the submission of the learned counsel that the appellant is only a distributor of the software of two principals located abroad and appellant is not covered by the definition at all. He takes us through clauses of the agreement with M/s. Livermore Software Technology Services Corporation and the appellant. According to the agreement, the distributor, the appellant, is required to market promote and sell licenses of the products in the territory; install or assist the customers with installation of the products; provide support for use of the product; make efforts to get annual renewal of licenses and take full responsibility for collection of fees. It is his submission that from the above clause of the agreement, it is quite clear that appellants service does not get covered under clause 5 ....
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.... a fixed number of copies of the software, which transaction is known as 'Internet Download.' 2.3 The software is also classified into two types, namely, Canned Software and Customised Software. Canned software means a software that is designed and created for sale to more than one person and it is designed in such a way that large number of people can use it on a variety of hardware and it is also called as 'Packaged Software' or 'Standard Software' or 'Normal Software' or 'Branded Software'. On the other hand, Customised Software means the software created for a single person or a specific customer to meet his specific requirement and it is also called as 'Tailor-made Software' or 'Specific Software'. 3.1 Contentions of the respondents: The amendment would fall under Entry 97 of List I of Schedule VII and the challenge to the legislative competency of Parliament is totally unsustainable. All standardised software are not like any other product or goods. There is no element of sales when it is supplied to the end user by means of EULA. Along with the Standardised Software a key (an alpha numerical code) is provided to the end user to activate the software by registering the sam....
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....n entered into. He submits that the appellant receives the order from the customers transmits it to the principal abroad and thereafter the Indian customers simply after accepting the terms and conditions of the license electronically, download the software and starts using the same. Therefore there is no separate agreement at all. Unfortunately, we found that on this aspect as to whether appellant has entered into a sub-license agreement or not; and whether appellants are indeed granting any sub-license on the basis of authorization by the principal abroad; has not been investigated, has not been considered or has not been discussed in the impugned order also. That being the position, we have no option but to accept the submission that this part of the agreement which provides for sub-licensing by the appellant has not been implemented. In such circumstances, the question that arises is whether the appellant is covered by Clause (v) of the definition or not. As can be seen from the definition reproduced above, the definition covers provision of right to use ITS for commercial exploitation including right to reproduce, distribute and sell information technology software and right t....
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....se for complete waiver in respect of normal period. 3.1 The second category on which demand of service tax has been made is on the ground that what is being claimed by the appellant as sale of software is not sale but covered by clause (vi) of the definition which reads as 'Providing the right to use information technology software supplied electronically'. We have already discussed earlier hereinabove that there is no evidence to show that there is an end-use license between the appellants and the customers in India. It was vehemently argued and submitted that the appellant only perform the function of receiving the order and transmit it to the principal and after the terms and conditions are accepted electronically and the software is installed, provision of after support service, annual maintenance charges (AMC) and ensuring that customers continues to renew the software only. He submits that there is no agreement between the customer in India and appellant and the end-user agreement is also not between the customer in India and the appellant. In such a situation, it cannot be said that appellant is providing the right to use information technology software supplied electronica....