2018 (6) TMI 1013

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....tices 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 31.3.200 7 7,68,9 0,796/ - 85,93,5 75/-       4 . Short paid 2006- 2009   1,85,60 1   5 . Total     3,61,72 ,988/-   2,01,93,493 /- 21,37,962 /-   2. The Department of Ex....

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....ing 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 that the above Explanation imposes additional tax liability contrary to the position clarified by the CBEC in its clarification issued prior to that date. So the contention is that this Explanation cannot have retrospective effect. In this matter, the appellant relies on the decision of Hon'ble Supreme Court in the case of UOI vs. Martine Lottery Agency Ltd reported in 2009 (14) STR 593....

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....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 services, which are inputs for the client or (iv) Production or processing of goods for, or on behalf of the client; or (v)Provision of service on behalf of the client; or (vi) A service incidental or auxiliary to any activity specified in sub-clause (I) to (VI) such as billing, issue or collection or recovery of cheques, payments, maintenance of prospective customer or vendor, public relation services, management or supervi....

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....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 the levy of service tax under BAS. This view  finds support in the very many case laws cited by the appellant.  In   the result we conclude that the levy of service tax on the activity of setting up of WAN, which has been outsourced to HSCL is not justifiable and hence, the demand is set aside. 17. Next we deal with the levy of service tax under the category of MMR.  Under the above category, services tax has been demanded ....