AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 644
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....sign for the right to use the software. From scrutiny of records and statements recorded the department was of the view that providing digital signature services under DSC and SSLC are taxable under the following categories for the different periods. a DSC & SSLC Business Support Services 1.5.2006 to 30.5.2007 b DSC & SSLC Development and supply of contents I.6.2007 to 15.5.2008 c DSC & SSLC Information Technology Services From 16.5.2008 onwards till 30.6.2012 A Show Cause Notice dtu20,10.2011 was issued proposing to classify the services of providing DSC and SSLC under the above categories and for demand of service tax, interest and for imposing penalties. After due process of law, the original authority classified issue of DSC under Information Technology Services and dropped the demand for the period prior to 16.52008 and confirmed the demand from 16.5.2008 to 30.6.2012. In regard to services of issuing SSLC, the Commissioner held that the activity would fall under BSS for the period 1.5.2006 to 30.5.2007, under Development of Content and Supply Service under 1.6.2007 to 15.5.2008 and under Information Technology Service. The demand on SSLC was confirmed with intere....
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....signature and listed in the Digital Signature Certificate. 2.2 As per section 41 (2) of the IT Act, by accepting a digital signature the subscriber certifies, inter alia, that he holds the private key corresponding to the public key listed in the Digital Signature Certificate and is entitled to hold the same. 2.3 As per Section 36 of the IT Act, upon issue of a DSC, the Certifying authority shall certify that (a) it has complied with the provisions of this Act and the rules and regulations made there under; (b) it has published the Digital Signature Certificate or otherwise made it available to such person relying on it and the subscriber has accepted it; (c) the subscriber holds the private key corresponding to the public key, listed in the Digital Signature Certificate; *[(ca) the subscriber holds a private key which is capable of creating a digital signature (cb) the public key to be listed in the certificate can be used to verify a digital signature affixed by the private key held by the subscriber] (d) the subscriber's public key and private key constitute a functioning key pair; (e) the information contained in the Digital Signature Certificate is accurate; an....
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.... has observed that the applicability would depend upon whether or not issuance of DSCs involve activities, namely, development of IT software, adoption service related to IT software or certification of IT software, which is a matter of fact. The CBEC has further observed that if the above mentioned activities pertaining to IT software are undertaken during the course of issuing DSCs, then this activity would not fall under IT service as well. Again, the Controller of Certifying authorities have written to the CBEC, clarifying that the issue of DSCs does not involve development of IT software, adoption or adaptation services related to IT software or certification of IT software, in response to which, the CBEC, vide its letter dated 28.7.2008, reiterated its earlier clarifications dated 5.6.2008 and observed that is a question of fact and if that be so there will be no service tax liability as already clarified and no further clarification required. 2.8 The activities involve, collection of applications forms for issue of DSCs, verification of the credentials, updating the information in the software platform of M/s.Verisign (the right to use the same has been granted by M/s.Veris....
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....sign have provided the right to use their software for issue of DSCs, to the appellant. Under Section 66 A the appellant is liable to pay service tax on the royalties being paid to M/s.Verisign and are paying such service tax. Issue of DSCs does not mean providing the right to use the IT software. (vi) providing the right to use information technology software supplied Electronically. Same as above under S.No.5. 2.9 Hence, as clarified by the CBEC itself, in the absence of any of the services envisaged in the definition of IT service is involved in then issue of DSCs, the demand of service tax under IT service in respect of the said activity of issue of DSCs is not at all sustainable in law and hence liable to be set aside. 2.1.0 The Ld.Counsel submitted that with regard to Secure Socket Layer Certificate (SSLC) which is a security protocol feature intended to provide secure transmission of data between the client and the server when exchanging information through internet, For example if a customer is making an online purchase by visiting a website, the customer shall be assured that he is transacting with the relevant web server and the transaction has to be protected....
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....sed voluntarily to protect data. Any person who wishes to secure the encrypted data can seek issuance of SSLC from appellant. M/s.Verisign has developed the software for SSLC also. On basis of agreement the appellant is engaged in issuance of SSLC in India. The activity is akin to that of DSC and the only difference being that DSC is statutorily recognized whereas SSLC is not so. 2.1.2 The role of the appellant is limited to that of procuring orders for issue of SSLCs, collecting various information on credentials from the subscribers and uploading them in M/s.Verisign's software portal. Upon completion of the above, the SSLC would be issued by Verisign's portal to the subscriber through email. After retaining its consideration, the appellant would remit the remaining amount to M/s.Verisign. An issue of SSLCs is not governed by the provisions of the IT Act or under any other Act, the appellant is not acting as a Certifying Authority for issue of SSLCs and the SSLCs are not issued by the appellant, unlike DSCs. 2.1.3 The Ld.Counsel submitted that the Board have clarified that the issuance of DSC will not fall under BAS, BSS or Information Technology service. The Commission....
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....rtificates' and 'certificate revocation lists' to the National Repository and ensure that the subscribers have continuous access to it; Thus the activities are in the nature of : i. recording of data in machine readable form, in as much as, they generate the 'private key' for the customers who have applied for issue of DSC or SSLC and store them securely, a/so generate the 'public key' for customers and ensure that the same is updated in the National Repository; keep the data of the National Repository up to date by supplying the data relating to 'public key certificates' & 'certificate revocation lists, provide time stamping service which includes creation, recording and maintenance of data relating to time log, etc. ii. providing interactivity to a user by means of a computer, in as much as, they ensure that the National Repository database is maintained up to date and facilitate the customers to have continuous access to it; in the case of SSLCs, the Taxpayer also helps in setting up a encrypted channel between the client server over HTTP which enables secure transmission of data over the internet. 3.1 The issue of Certificate of Digital ....
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....opment and supply of content' includes development and supply of mobile value added services, music, movie clips, ring tones, wallpaper, mobile games, data, whether or not aggregated, information, news and animation films; As per Section 65 (105) (zzzzb) ibid, taxable service is defined as any [service provided or to be provided],- "(zzzzb) - to any person, by any other person in relation to development and supply of content for use in telecommunication services, advertising agency services and on-line information and database access or retrieval services; . "Section 65 (53a) - 'Information technology software' means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment;" 6. The Ld.CounseI for the appellant has given a detailed description of the activities by which they are issuing the Digital Certificate namely DSC and SSLC. With regard to the taxability of issuing DSCs, the department has issued letters clarifying that the s....