TaxTMI 
TaxTMI 
2026 (3) TMI 104
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.... of Management, Maintenance or Repair service; however, failed to discharge service tax of Rs.4,50,15,137/- during the said period claiming its classification under Business Auxiliary Service falling under the exclusion clause of Information Technology service. Consequently, show-cause notice was issued to the appellant on 29.09.2010 invoking extended for recovery of the service tax of Rs.4,50,15,137/- with interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Hence, the present appeal. 3. At the outset, the learned advocate for the appellant has submitted that the show-cause notice issued on 29.09.2010 for recovery of Service Tax for the period from 1st May 2006 to 15th May 2008 is barred by limitation as during the said period the appellant had duly disclosed the services rendered by them in their ST-3 returns filed with the department claiming its classification under Business Auxiliary Service. They have been filing regularly all declarations and returns as required by the law and the present demand is based on verification of books of return filed by the appellant; also all these facts were within the knowledge of the department since th....
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.... • Bellary Computers vs. CCE: 2007-TIOL-1856-CESTAT Bangalore • Dataware Computers vs. CCE: 2008-TIOL-1433-CESTAT Bangalore • CCE vs. Deloitte Tax Services India Pvt. Ltd.: 2008-TIOL-629-CESTAT Bangalore 5. Also, they referred to the CBEC Circular No.62/11/2003-ST dated 21/08/2003 which had clarified that the services rendered by the appellant are in the nature of IT services and fall outside the scope of service tax. Further, he has submitted that in any case the Facility Management Service would not fall under the scope of Management, Maintenance or Repair service and the Circular No.81/2/2005-ST dated 07.10.2005 referred to and relied by the Commissioner in confirming the demand is read out of context, hence the order is bad in law. He has submitted that this Tribunal in the case of United Telecom Ltd. vs. Commissioner of Service Tax: 2009 (14) STR 212 (Tri.-Bang.) held that WAN and LAN refer to network of interconnectivity computers spanning wide areas or localized sites, hence, cannot be considered as an immovable property. Also, in support, he referred to the judgment in the case of IBM India Pvt. Ltd. vs. CCE: 2024 (23) CENTAX 243 (Tri-Ban....
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....s and networking under different agreements to Karnataka Bank Limited and Metro Cash and Carry India Limited. 8. The brief scope of service provided to Karnataka Bank Limited as per agreement are as follows: NETWORK Facility Management Services: 1. WAN & LAN Management at Data Centre, Bangalore & Head Office, Mangalore. 2. WAN Management for all the Regional Network (cluster) centers, branches (includes the new branches to be added during the contract period and also includes the link commissioning etc.). 3. Vendor Management, Inventory Management for the products/services related to networking. 4. Link support for an average of 375 branches SERVER Facility Management Services: 1. Server Management at Data Centre Bangalore and Head Office Mangalore (includes all the existing servers and the new servers to be added during the contract period). 2. Vendor Management, Inventory Management for the products/services related to servers. 9. Likewise, network support provided to Metro Cash and Carry Limited are as follows: SUPPORT DELIVERABLES SERVICE DESK (HELP DESK) SERVICES SCOPE OF W....
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.... with the vendors for optimal performance and resolution of problems • In case of hardware failures, which are out of warranty, take quotations from atleast three vendors and submit the same to concerned department within • Metro Cash & Carry. • Installation support on receipt of necessary equipment Escalation of user calls to hardware/software vendors • Tracking vendor response against defined SLA's with the vendor • Keeping track of hardware and software maintenance contracts entered into by • Metro Cash & Carry with the various vendors • Follow up to ensure completeness of resolution 10. The summary of services provided by the appellant to Karnataka Bank Limited and Metro Cash and Carry are as follows: • Co-ordination with vendors of equipments to keep the equipments running at all points in time, • Perform LAN administration and related security functions. This includes providing LAN server administration services for servers including user registration, creating and maintaining user profiles, granting user access and authorization, providing ongoing user ....
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....Service" means any service in relation to- (i) Promotion or marketing or sale of goods produced or provided by oг belonging to the client, or (ii) Promotion or marketing of service provided by the client; or (iii) Any customer care service provided on behalf of the client; or (iv) Procurement of goods or services, which are inputs for the client; or Explanation: For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client. (v) Production and processing of goods for, on behalf of the client; or (vi) Provision of service on behalf of the client; or (vii) A service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relations services, management or supervision, And includes services as a commission agent, but does not include any information technology service and any activity th....
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....ifferent services which cannot be classified in the manner specified in clause (a), shall be classified as if they consisted of a service which gives them their essential character, in so far as this criterion is applicable; (c) when a service cannot be classified in the manner specified in clause (a) or clause (b), it shall be classified under the sub-clause which occurs first among the sub-clauses which equally merit consideration. "(3) The provisions of this section shall not apply with effect from such date as the Central Government may, by notification, appoint."; 15. The Hon'ble Supreme Court in the case of Commissioner of Customs vs. Federal Bank Limited: 2016 (3) TMI 354 - SC while considering the scope of Cash Management Service analyzing the aforesaid proviso and observed that when for any reason, a taxable service is, prima facie, classifiable under two or more sub-clause of clause (105) of Section 65, classification shall be effected in the prescribed manner laid down under the said provision. Following the principle laid down in the said case, we find clause(b) is more appropriately applicable in determining the classification of the composite serv....
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....have effect, as if, for the words "one year", the words "five years" had been substituted". 9. As may be seen, the demand could only be raised within a period of one year from the date unless the short payment of service tax was by reasons of (a) fraud or (b) collusion or (c) wilful mis-statement or (d) suppression of facts or (e) contravention of any of the provisions of Chapter V of the Finance Act or the rules made thereunder with intent to evade payment of service tax. 10. The reasons for invoking extended period of limitation in the show cause notice are in paragraph 8, which reads as follows:- "8. Whereas, the assessee has not paid service tax amounting to Rs. 3,99,903/- on the services provided during the period 2006 2009. Had the audit not been conducted it would not have come to the knowledge of the department that the assessee has not deposited the service tax correctly. Therefore, it is clear that the assessee has wilfully suppressed the value of taxable services during the said period from the Department and thereby contravened the provisions of Section 67, 68 & 69 of the Finance Act, 1994 read with Rule 4 & 6 of the Service Tax Rules, 1994 wi....