TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 311
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....ssued notice that the appellant had discharged Service Tax liability in some cases and not in others. The notice stated that the appellant had not discharged their Service Tax with respect to services rendered to M/s. Attano Media and Education Private Limited (which were later taken over by M/s. HCL Info systems Limited). It was pointed out by the learned Counsel that the appellant had provided content to M/s. Attano Media and Education Private Limited. The content provided by the appellant was a Software product called 'Edukite Interactive Curriculum Software' containing Educational content in Science and Mathematics for students of Class 10, 11 and 12 studying under Central Board of Secondary Education (CBSE). The original adjudicating a....
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.... of software and permanent transfer of the Intellectual Property Right of content therein. He pointed out that the appellant had paid CST@2% against C Form on this Sale. 4. Learned AR relies on the impugned order. 5. We have considered the rival submissions. We find that the written submissions given by the learned Counsel of the appellant, it has categorically mentioned that the software has been supplied on a medium on payment of VAT/Sales tax. It has been pointed out that the medium is in the nature of USB Stick/DVD/Hard Drive. Reliance has been placed on the decision of the Hon'ble Apex Court in the case of Quick Heal Technologies Ltd.- 2022 (63) GSTL 385 (S.C.). It is notice that the Hon'ble Apex Court in the case of Quick Heal Techn....
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....C 593 = 2001 (128) E.L.T. 21 (S.C.), was heavily relied on by this Court. It was held :- "27. In our view, the term "goods" as used in Article 366(12) of the Constitution and as defined under the said Act is very wide and includes all types of movable properties, whether those properties be tangible or intangible. We are in complete agreement with the observations made by this Court in Associated Cement Companies Ltd. A software program may consist of various commands which enable the computer to perform a designated task. The copyright in that program may remain with the originator of the program. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put....
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.... be said to fall outside the purview of 'goods' merely because it is intellectual property; so far as 'unbranded software' is concerned, it is undoubtedly intellectual property but may perhaps be outside the ambit of 'goods'." (Emphasis supplied) 29. Mr. Sorabjee submitted that the High Court correctly held that unbranded software was "undoubtedly intellectual property". Mr. Sorabjee submitted that the High Court fell in error in making a distinction between branded and unbranded software and erred in holding that branded software was "goods". We are in agreement with Mr. Sorabjee when he contends that there is no distinction between branded and unbranded software. However, we find no error in the High Court holding that branded softwa....
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....sarily be regarded as "goods" under the aforesaid provisions of the Customs Act, these items being moveable goods, covered by Section 2(22)(e) of the Customs Act. What was transferred was technical advice on information technology. But the moment the information or advice is put on a media, whether paper or diskettes or any other thing, the supply is of a chattel. It is in respect of the drawings, designs, etc. which are received that payment is made to the foreign collaborators. The question whether the papers or diskettes etc. containing advice and/or information are goods for the purpose of the Customs Act was answered in the affirmative. This Court clearly held that "the intellectual property when put on a media would be regarded as an ....
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.... the necessary concomitant of the plain language of the statute viz. a "transfer of the right to use" and not merely a licence to use the goods; (e) Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others." 55. The sum and substance of the ratio of the case of BSNL (supra) as discernible is that the contract cannot be vivisected or split into two. Once a lump sum has been charged for the sale of CD (as in the case on hand) and sale tax has been paid thereon, the revenue thereafter cannot levy service tax on the entire sale consideration once again on the ground that the updates are being provided. We are of the view that the artificial....