TaxTMI 
TaxTMI 
2024 (2) TMI 911
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....The appellant has obtained service tax registration under the category of Commissioning and Installation Services as service provider for services provided to Reliance Industries Limited and paid the service tax on the whole contract value. The appellant awarded major part of contract to M/s Fisher Rosemount System, Inc (Hereinafter referred in short as M/s.FRS) located outside India. The contract was given to M/s.FRS for Project Management Service, Application Software Engineering Service and URS Preparation Assistance Service. The break-up of the amount of consideration of US$ 26,58,325/- is as follows: Sr. No. Description Amount(US$) 1 Project management 5,96,609 2 Application service 8,23,181 3 Skid FAT (on T&M basis) Protocol Execution 1,92,725 4 Training system service 3,952 5 Application software FAT 27,226 6 Validation 5,84,460 7 Complete URS Development 35,578 8 Travel and living expenses 1,47,023 9 Remote operator station - 22 nos. (Supply of goods) 2,47,562 Total : 26,58,325 The contract value of the said contract was increased on two occasions by US $ 3,31,704 an....
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....es under management consultant services. The appellant has not paid service tax on the balance services as either same were relating to the software services, reimbursement of services or supply of goods. The said activities were not taxable prior to 16.05.2008. The nature of service received by the appellant are once again reproduce below for each head of service : a) Application Software for $ 8,23,181/- : M/s.FRS has developed the customized software for functioning of Delta V system as per the requirement of M/s.RIL. These software were located in CD form by M/s.FRS. b) Skid FAT (ON T & M basis) Protocol execution for $ 1,92,725/- : The above software were loaded from CD form into Delta V System. After loading of the software, the function of the system were check on test basis. It is only a process of testing the software with the system. c) Training System Service for $ 3,952/- : The operation of the software were explained to the persons of the customer by giving the training. This service is called as Training system service. d) Application Software FAT for $ 27,226/- : It is testing of software activity to ensure that the software is dev....
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....n cited earlier. Further held that w.e.f. 16-5-2008, information technology service was introduced and thereby it cannot be said that same was covered under the category of management or business consultant services prior to 16.05.2008 and thereby demand was set aside. The supreme court has dismissed the department's appeal against the said order in Commissioner v. IBM India Pvt. Ltd. - 2010 (18) S.T.R. J137 (S.C.). In the present case, appellant has not paid service tax on Application Software Engineering Service received from abroad. The same will clearly not taxable up to the period of 16.05.2008. Further, by relying upon the said judgment, Ahmedabad tribunal in the case of BASF INDIA LTD VERSUS C.C.E. & S.T. -SURAT-II 2023 (6) TMI 997 - CESTAT AHMEDABAD, has also held that the department can not demand the service tax on the software related services under the category of management or business consultant services. It is further submitted that In the case of Basti Sugar Mills Co. Ltd. v. CCE [2007] 7 STR 431 (New Delhi-CESTAT), the tribunal observed that the definition of 'management consultant' envisaged advisory service only and not managem....
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....A got subsumed in the service provided by the appellant to Indian Hotels. It was held by the tribunal that there is no dispute that the appellants have discharged service tax on the overall services provided to Indian Hotels. The service on which demand was made was subsumed in the total service and it's value which was charged by the appellant to their client i.e. Indian Hotels and the said total value suffered service tax in the hands of appellant themselves. The demand of service tax in the present case amounts to double taxation on the part of the same service charges. The tribunal has further held that the issue is also revenue neutral in nature and therefore set aside the demand. In the present case, the company executed an order for Supply of Delta V System and service contract for installation and commissioning of the DCS system for Reliance Industries for its Life Sciences Project at Mumbai. The Life science being a new to India and is also complicated subject, company has sub-contracted major part of the Service Order to M/s Fisher Rosemount vide letter bearing no. RLS-LSFBIC/001 dtd. 02.09.2005. The appellant has obtained service tax registration under the categ....
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....vices provided by M/s FRL under the category of Management consultant services under reverse charge mechanism. The appellant was availing the credit of the same. The sample copy of Cenvat credit register is already attached as Annexure-1 to substantiate that the same. The tribunal in the case of SAROVAR HOTELS PVT. LTD 2018 (10) G.S.T.L. 72 (Tri. - Mumbai) has dropped the demand on the ground the revenue neutrality. Further, in the case of JET AIRWAYS (I) LTD 2016 (44) S.T.R. 465 (Tri. - Mumbai) has held that services received by the appellant on which demand has been made on reverse charge basis are directly linkable to the output services provided by the appellant and thereby situation is revenue neutral and thus service tax cannot be demanded. The same has been approved by the supreme court. The appellant further relies upon the following judgments : Coca-cola India Pvt. Ltd. 2007 (213) ELT 490 (SC) Indeos ABS Ltd. 2010 (254) ELT 628 (Guj) Indeos ABS Ltd 2011 (267) ELT A 155 (SC) 5. Entire demand is barred by limitation. The show cause notice was issued in November 2010 whereas the demand raised for the period prior ....
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....long as the main contractor has paid the service tax on the entire value including the value charged by sub-contractor to the main contractor. As already stated above, the appellants received a contract for supply, installation and commissioning of DCS systems for M/s.RIL for its Life Science project at Mumbai. The Appellants has sub-contracted major part of the service order to M/s.FRS. The Appellants is the Contractor and M/s.FRS is sub-contractor for the project. The Show Cause Notice demanded service tax under import of service in respect of services provided by M/s.FRS to the Appellants. In the present case, M/s.FRS is the sub-contractor. The show cause notice also admit that in para 9 that the project order issued by the customer namely M/s.RIL on the Appellants is a single contract and the service provided by M/s.FRS cannot be recognized as a separate activity. Earlier, there were various circular which had clarified that sub- contractor need not pay service tax if main contractor pays the service tax. The some of which are as follows : Frequently asked Questions Published by Director of Publicity and Public Relation, Customs and Central Excise, Ne....
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....d that the appellant had paid service tax on the reverse charge basis in respect of the service received from abroad M/s Fisher Rosemount System only on the some activities such as project management and validation service. However, for the remaining activities of the Foreign Service provider no service tax is paid on the ground that those services are related to software services which became taxable only with effect from 16.05.2008 where as the period in the present case involved is from March, 2006 to March, 2008. 4.1 We find prima facie force in the claim of the appellant that the services are not classifiable under 'management consultant service' whereas the same is prima facie classifiable as software services in view of the judgment in the case of IBM India Pvt. Ltd (Supra) and the services of software came under the tax net w.e.f. 16.05.2008. However, without going into the merit of the case, we are of the view that the appellant have made out a strong case on limitation. In the present case against the same contract the appellant have been paying service tax in respect of some of the activity of service received from the board, whereas in respect other activities, they ....