TaxTMI 
TaxTMI 
TaxTMI 
2020 (11) TMI 753
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....7.4.2006 and @ Rs. 200/- per day or @ 2% of service tax per month from 18.4.2006 up to 10.5.2008; and (v) Imposed penalty of Rs. 5,000/- under Section 77 of the Finance Act, 1994. 2. Briefly the facts of the present case are that the appellants are developer of an internet based trading software 'Trade Anywhere' and licensing the same to its customers who are primarily share broking houses / financial institutions / banks and media portals. The appellant for providing such software license, has entered into Software License Agreements with various share broking houses, etc. For licensing of software, appellants are collecting charges termed as 'license fee' and on this value they are collecting and discharging CST @ 4% for interstate sales and excise duty. The department entertained the view that the appellants are liable to pay service tax under Management or Business Consultant Service as provided in Finance Act, 1994 but are not paying the same and has also not informed the department about non-payment of service tax on Management or Business Consultant Service. Department, thereafter, on 8.4.2011 issued a show-cause notice to the appellant on the following allegations. (i....
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.... not sustainable in law as the same has been passed without properly appreciating the facts involved in the case and without considering the precedent decisions of this Tribunal and the higher courts. He further submitted that as regard 'Trade Anywhere' software, they are not undertaking any consultancy work. The skill required and the service provided are in the field of engineering rather than in the field of trading or finance. The appellant's software and the related services are to be treated as a product in the field of engineer notwithstanding any inputs that might have been taken from other domain groups. He further submitted that the respondent has failed to establish that the appellant's customers were receiving any advice / consultation from the appellants in the areas of management. In fact, according to the learned counsel, the department has not verified from any customers of the appellant as to what kind of advice if any are being received by them from the appellant. 6. The learned counsel further submitted that Information Technology Software Service was specifically made taxable under Information Technology Software Service only from 16.5.2008 and the disputed pe....
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.... Consultant Service and Information Technology Software Service. 65(65) "management or business consultant" means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organization or business in any manner and includes any person who renders any advice, consultatncy or technical assistance, [in relation to financial management, human resources management, marketing management, production management, logistics management, procurement and management of information technology resources or other similar areas of management]; [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 computer or an automatic data processing machine or any other device or equipment;] [65(105)(zzzze) to any person by any other person in relation to information technology software for use in the course, or furtherance, of business or commerce, including- (i) Development of information technology software, (ii) Study, analys....
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....ntrally, optimizing their costs by providing and extremely flexible and scalable solution, handle huge customer base, etc. These activities carried out by the assessee were covered under Enterprise Resource Planning Software applications and the same was rightly classifiable under the category of Management or Business Consultant Service and are liable for service tax." 11. From the findings recorded hereinabove, the learned Commissioner after examining the services rendered by he appellant has come to the conclusion that the activities carried out by the appellant is covered under the category of Enterprise Resource Planning (ERP) Software Application and the same is rightly classifiable under the category of Management or Business Consultant service and are liable for service tax. Now the issue arises as to whether Enterprise Resource Planning implementation service would fall under Management or Business Consultant Service or Information Technology Software Service. After carefully considering the definition of Management or Business Consultant Service and Information Technology Software Service cited supra, we are of the view that Enterprise Resource Planning implementation w....
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.... Ltd.: 2004 (!79) ELT 472 (Tri.-Chennai) (d) Kaveri Telecom Products Ltd.: 2006 (1) STR 226 13. Further, we find that the issue involved in the present case is no more res integra and has been settled by various decisions of the Tribunal and the apex court as cited in para 6 above. In this regard, it is pertinent to mention that this Tribunal in the case of IBM India Pvt. Ltd. cited supra has specifically held that implementation of Enterprise Resource Planning does not attract service tax under the category of Management or Business Consultant Service. The relevant findings are recorded in para 6 and 7, which is reproduced herein below: "6. We have carefully gone through the records of the case. The point at issue is the leviability to Service Tax under the category of 'management consultancy service' in respect of the ERP implementation services. It is seen that the Department attempted to classify the ERP services under 'management consultancy service' earlier and the Tribunal's decisions categorically held that during those time, the said services would fall under the category of consulting engineering services, however, they were excluded from the scope of consulting engi....
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....en the services rendered by the appellant were excluded from the scope of consulting engineer's service and also the judicial pronouncements made it clear that they would not be covered under the management consultancy services. In view of these, there is no merit in the demands confirming the Service Tax of the services under the category of management consultancy services for the period prior to 16-5-2008. It should be borne in mind that the appellants have already been paying the Service Tax for ERP Planning and advice under the category of management consultancy service. Hence, the impugned orders have not merit. We set aside the same and allow the appeals with consequential relief." 14. The decision of the Tribunal in the case of IBM India Pvt. Ltd. cited supra has been upheld by the apex court by dismissing the appeal of the department as reported at 2010 (18) STR J137 (SC). Hence, by following the ratio of the above decisions, we hold that appellants are not liable to pay service tax during the disputed period under the category of Management or Business Consultant Service. 15. Coming to the contention of the appellant that the entire demand is barred by limitation, we not....