TaxTMI 
TaxTMI 
2016 (2) TMI 475
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....n with 369 projects executed by the respondent, M/s HSBC Software Development (India) Pvt Ltd. 2. The impugned order has confirmed tax demand of Rs. 5,42,40,164/- while dropping the demand for Rs. 1,27,12,457/- in show cause notice dated 5 th August 2008 and dropping proceedings entirely in the other five show cause notices. The dropped demand in the first show cause notice relates to 'technical testing and analysis' service while the confirmed demand relates to 'maintenance or repair service' and Revenue seeks quashing of that portion of the demands that were dropped and setting aside the recourse to section 80 of the Finance Act, 1994 in the impugned order. M/s HSBC Software Development (India) Pvt Ltd has filed cross-objection u....
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....ervice and (vi) dated 15 th April 2010 covering the period from October 2008 to March 2009 for demand of Rs. 1,31,12,461 under 'maintenance and repair' service were issued. Revenue contends, in the grounds of appeal, that the adjudicating authority has not considered the specific requirement as per Rule 3(1)(ii) of Export of Service Rules, 2005 that performance of service, even partly, out of India is a necessary condition for treating the rendition of both these services as exports. It is claimed that the activities in relation to testing of software and maintenance/ repair of software is executed off-site i.e. from India and hence the services are taxable. 4. According to the respondent in appeal of Revenue, 97% of their services are....
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....y, in relation to 'technical testing and analysis service' and 'management maintenance and repair service for the period after 1 st March 2008, have not, even peripherally, been countered in the grounds of appeal. Mere assertion that 'performance in India' is the meaning assigned to it by the reviewing Committee will not suffice to overrule the provisions of the law and precedent judgements examined in the impugned order. Indubitably, the incorporation of 'information technology software' in section 65 (106) of Finance Act, 1994 defining 'technical testing and analysis' can have no implication other than it being outside the tax net prior to 16 th May 2008. That the activity of the respondent is in relation to software has b....
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....es or services, and with deliberate intent, some instrument is promulgated by government to ensure non-taxability of exports. 8. Whether it is 'technical testing and analysis' or 'management, maintenance or repair' that is performed on software of the clients of the respondent, it is accepted that expert employees sitting in India have to access the servers/computer networks abroad. The performance of these operations is manifested in the efficient and smooth working of the software in the operations of the client. The location of the client cannot be uncoupled from the performance of the service. And as at least some portion of the service is, thereby, rendered outside the country and hence the renders these services outside the a....
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....d upon and at page 17 of the paper book, the Government of India in the Ministry of Finance (Department of Revenue) exempted the taxable service specified in subsection 48 of section 65 of the Finance Act, 1994 provided to any person in respect of which payment is received in India in convertible foreign exchange, from the whole of the service tax leviable thereon under section 66 of the said Act. The proviso to this exemption notification is not attracted to facts of our case. It is conceded before us that the respondent received payment in India in convertible foreign exchange and that this payment is not repatriated by the respondent from or sent outside India. 21. ........................... 22. ........................... 23. ....