TaxTMI 
TaxTMI 
2018 (6) TMI 1013
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.... Service. In this matter, two show cause notices were issued one dated 9.4.2010 and another dated 4.10.2010. The impugned order adjudicated the said two show cause notices. The details of the demands raised in these SCNs are as follows: Show Cause Notice 9/4/2010 Show Cause Notice 4/10/10 S . N o . SERVICE PERIOD Amount collected as per Department Rs. ST payable as per Department Rs. period Amount collected as per department ST payable as per department 1 . Business Auxiliary Services( Telecommunication (WAN) Service provided to ETTSA) 1.10.200 4 TO 31.3.200 9 16,90, 77,20 7/- 2,00,05 ,770/- 2009-2010 1,73.76,39 6/- 17,89,796 /- 2 . Management , Maintenance or Repair Service (Management of Computer Infrastructure of ETTSA) 2006- 2008 6,00,3 3,514/ - 73,88,0 42/- 1.4.2008 to 15.05.2008 28,17,097/- 3,48,193/- 3 . Management , Maintenance or repair Services (Software Maintenance services provided by the appellant 1.10.200 4 to 3....
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....is head is the remuneration for the salary of Help Desk operators and Data Entry Operators employed by them for operation of the infrastructure set up. It is their contention that the said activity will not come within the definition of Management, Maintenance for Repair Service because the entry under Section 65(64) relates to management of properties and doing part of activities that are done using such infrastructure cannot be considered as maintenance of properties. 5. Third item is relating to maintenance of software. The appellant submits that the demand under this category is on account of maintenance of software done by the appellants prior to 1.6.07. It is their contention that prior to 1st June, 2007, maintenance of software could not be classified as maintenance of any 'goods'. He points out that an Explanation was added in Section 65(64) of Finance Act 1994 defining such services. The said Explanation reads as under: 'Explanation: For the removal or doubts, it is hereby declared that the purpose of this clause, (a) 'goods' includes computer software; (b) 'Properties' includes information technology software'. 6. The appellant submits tha....
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....rocured such services from HSCL on back-to-back basis for supply to ETTSA. Since, the appellant has been charging mark-up in the transaction, while filing to ETTSA, the Department was justified in charging service tax on such mark up. 11. Heard both sides and perused the record. 12. The disputes are as follows:- i. Levy of Service Tax under the category of Businesses Auxiliary Services, which was out sourced by the appellant to HSCL for implementation of Wide Area Network (WAN) for ETTSA. ii. Demand of Service Tax under the category of Management, Maintenance and Repair Services for the activities carried out by the appellant for ETTSA. iii. Demand of Service Tax under the category of MMR for maintenance of software. 13. First we take up the issue of demand of Service Tax under the category of Business Auxiliary Service. The definition of BAS is reproduced below; Section 65(19) 'Business Auxiliary Service' means any service in relation to:- (i) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) Promotion or marketing of service provided by the client; or (iii) Procurement of goods or se....
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....Area Network. The Explanation which is appended at the end of the definition in Section 65 (19) for BAS explains what constitutes „Information Technology Service '. One of the activities subsumed within the IT service is the activity of 'system networking'. Hence leads us to conclude that the activity out sourced to HSCL was in the nature of Information Technology Service. The definition of BAS has excluded Information Technology Services, through the above Explanation. Consequently, we are led to the conclusion that even if the appellant has procured the service of establishing WAN through the outsourced service provider HSCL, the activity will not be covered within the definition of BAS. 16. Another argument advanced by the appellant in resisting the levy under BAS is that the service procured by them for ETTSA through HSCL is not in connection with any business of the client who is an arm of the Government of Punjab. Thus in the present case the service rendered by the appellant has been rendered to a Government Department which are not engaged in business but in rendering public services. Hence the procurement of service for ETTSA cannot be brought within t....