AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 183
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....sed on Shri Rajiv Nandvani, Director and VP (Facilities) of the Appellant company by the aforesaid order dated 11.11.2019. 2. Briefly stated, the facts of the case are that the Appellant, M/s Innodata India Private Limited (formerly M/s Innodata Isogen Private Limited) ('IIPL' in short), are providing Content Support Services to its ultimate holding Company, Innodata Inc., USA, which mainly include data conversion, knowledge process outsourcing (KPO) and IT enabled services. 3. It was noticed by the Revenue that the Appellant had taken centralized registration from the Service Tax Commissionerate, Noida vide Registration No. AAACI2425GSD002 initially at A-14-15, Sector-16, Noida and had subsequently changed their address for providing various taxable services. On perusal of the ST-3 returns filed by the Appellant, it was noticed that the taxable services being provided/exported by them had been described as 'OIDAR services' in their ST-3 returns filed upto June 2012, and from July 2012 to March 2013, the services exported were described as 'Development and supply of contents for use in Telecom services', 'Advertising agency' etc., and from April 2013 onwards the services expo....
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....es' The Ld. Chartered Accountant referred to SOW dated 01.07.2012 entered between Innodata USA and American Psychogical Association ('American PSY' for short) which provides the scope of work as below: a) Innodata USA would provide i) capture of bibliographic information। and abstracting and indexing of articles from serial publications, journals, books and book chapters, and conference papers/abstracts; ii) indexing of dissertation records (long piece of writing) associated with its PsycINFO indexing and abstracting workflow project; b) Innodata USA shall utilise American PSY's Hermes/Apollo system in processing the source materials, which shall be accessed through VPN connection; c) The deliverables shall be saved in American PSY's Hermes/Apollo system. The said work has to be undertaken by the Appellant for Innodata USA as per service agreement dated 10.12.2008. 'IT Enabled Services' The Ld.Chartered Accountant referred to SOW dated 14.03.2014 entered between Innodata USA and British Standards, ('BSI' for short), which provides the scope of work as below: BSI would like Innodata USA to perform co....
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.... • Advertising on internet • Providing cloud services (Google drive) • Provision of e-books, movie, music, software, and other intangibles via internet (Hotstar, Amazon Prime Video) • Providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network • Online gaming (Steam). It was therefore, alleged that services provided by the Appellant fall under the category of OIDAR services as both the required conditions are fulfilled in all the three segments viz., data conversion services; KPO services; and IT enabled services. The claim of the Appellant that the service provided by them are covered within the definition and scope of 'Business Support Service' from 2013-14 was found to be erroneous in view of the meaning assigned to it under Section 65(104c) of the Act as it existed before 01.07.2012, thus 'Business Support Services, means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managi....
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....s. 11. Shri Abhinav Kalra, Ld. Chartered Accountant appearing for the Appellant submits that the Appellant provides services relating to data conversion, KPO and IT enabled services. Innodata USA provides content solutions, data analytics and related services to its customers located outside India; the appellant works as a content production facility for rendering IT relating services and allied activities, and all services are exported out of India to Innodata USA. 12. Ld. CA further demonstrates that raw data/content is supplied by clients of Innodata USA to the Appellant and after execution of the work, the processed/converted data is delivered through file transfer protocol (FTP) or secured file transfer protocol (SFTP). The ownership, intellectual property and copy rights of raw data/content before or after processing of data/content rest with the data/content providers. When the Appellant has no right to put up the data on internet or use it in any way except working upon the same to make it more useful as a job worker/processor, there is no reason to hold that Appellant is providing the data online for access or retrieval to the customers/public and charging any fees/c....
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....onic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images, and sounds or intelligence of any nature, by wire, radio, visual or other electro-magnetic means but shall not include broadcasting services. 14. The Appellant admitted that they inadvertently classified the services of the above nature of services under the category of OIDAR services defined under Section 65(75) of the Act, as it existed prior to introduction of negative list effective from 01.07.2012, as under: "65(75) "on-line information and data base access or retrieval" means providing data or information, retrievable or otherwise to any person, in electronic form through a computer network". Due to misunderstanding of the above definition as if all services provided in electronic form through internet would be covered in this category, the appellant classified above IT enabled support services provided through computer network as OIDAR services. c) It was only after introduction of Negative list from 01.07.2012 tha....
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....rieved on payment of specified charges by the customers/public. But when the raw data and information is digitized, abstracted, indexed and the content so digitized is transmitted to the owner of the supplier of raw data/information through computer network for being used by them in their own use or business, then such service would be data conversion/processing, KPO/BPO or IT enabled services and fall outside the purview of OIDAR services. The same will be broadly covered within the scope of 'Support Services of business or commerce' or 'Business support services' (BSS) or telecommunication services. 15. The Appellant corrected the nomenclature of their services from OIDAR to services other than OIDAR being covered under Section 65B (44) of the Act in their service tax registration. The Appellant was in his legal right to correct the classification or broad nomenclature of services based on proper understanding as per the clarification issued by the CBEC. The allegation levelled in this regard that it cannot be changed is wholly untenable and without any reasonable and legal ground. The place of provision of service in respect of services provided by the Appella....
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....omers who may utilize the data for providing services under the category of OIDAR service (main service) by putting them on the internet for public/clients or for their personal use. The services rendered by appellant are therefore broadly covered under the category of Business support services or telecommunication services using tools of information technology, and shall not be covered under the category of OIDAR services. 19. We find that the instant case is wholly covered by the decision of this Tribunal in the case of State Bank of India Vs. Commissioner of Service Tax, Mumbai-II (supra) wherein SBI had entered into a contract for providing Virtual Private Network (VPN) which enabled SBI and its branches to retrieve data from the data centre maintained by the applicants in different countries abroad and demand was made under OIDAR service. This Tribunal held as under: "The ownership of data is quite clearly with the SBI foreign offices. Equant have not provided any data for access/retrieval. They have simply enabled the connectivity. They have provided connectivity which enables the FOs to access/ retrieve data online. The responsibility of Equant is to ensure that ....