TaxTMI 
TaxTMI 
2026 (5) TMI 755
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....2-13 to 2014-15 and certain discrepancies were observed by the audit team. On the basis of those discrepancies, a Show Cause Notice dated 23.08.2018 was issued to the Appellant by invoking the extended period of limitation. The Appellant contested the allegations made in Show Cause Notice and filed detailed reply to all the allegations raised in the Show Cause Notice. After following the due process, the Adjudicating Authority vide Order-in-Original dated 05.02.2019, confirmed the demands of Rs.44,73,582/- & Rs.49,868/- under proviso to Section 73(1) of the Finance Act, 1994 along with interest under Section 75 of the Act and also imposed equal penalties under Section 78 and a penalty of Rs.5000/- under Section 77 of the Act, and also appropriated the amount already paid against the said demands. Aggrieved by the said Order-in-Original, the Appellant filed appeal before the Commissioner (Appeals), who vide the impugned Order-in-Appeal, has partially allowed the appeal of the Appellant and confirmed the demand of service tax of Rs.40,020/- on exhibition expenses of Rs.2,66,800/- incurred during the FY 2016-17 and also confirmed the demand of service tax amounting to Rs.32,52,159/- o....
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....vant clause, it is apparent that the company was providing software as well as service to their customer to cater the need of the travel industry. The predominant part of the contract is sale of software which was sold on perpetual basis. In the EULA, there is separate schedule for service which is Service Level Agreement. He further submits that the Appellant has discharged VAT on the sale of software, considering the same as the sale of products and has further paid service tax for the support services provided, if any, as mentioned in the separate schedule. He also submits that in fact, the Appellant was dealing in sale of goods as packaged software which are delivered in the form of CD to the customers or the customers also have facility to download through internet. In support of this submission, he relies on the following case-laws: * Infotech Software Dealers Association vs. Union of India - 2010 (20) STR 289 (Mad.) * M/s Tatas Consultancy Services vs. State of Andhra Pradesh - 2004 (178) ELT 22 (SC) * Commr of S.T., Delhi vs. Quick Heal Technology Ltd - 2022 (63) GSTL 385 (SC) * CBEC Circular No. 81/2/2005-ST dated 07.10.2005 The learn....
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....re product company primarily engaged in development of standardized software products catering need of the travel industry. As per the End User License Agreements, the Appellant was providing Information Technology Software Service in the form of sale of license along with perpetual right to use and therefore, the Appellant was of bona fide belief that no service tax was payable on sale of such software and under this belief, the Appellant had also discharged VAT on the said sale of software. He further submits that there was absolutely no intention of evading payment of service tax as the Appellant still bona fidely believe that there is sale of goods on which appropriate VAT has been paid. 4.4.3 The learned Counsel further submits that the Appellant has already disclosed the entire amount of expenses/income for the relevant period in its audited books of accounts and therefore, there is no suppression of facts as well. He also submits that the Appellant had fully cooperated with the service tax authorities during the audit conducted in February 2018. All the documents were duly produced by the Appellant and the Appellant company explained its position to the audit team in deta....
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....f limitation in terms of proviso to Section 73(1) of the Finance Act. Further, we find that in the present case, the Appellant fully cooperated with the department and provided all the information/documents which were required and also admitted substantial liability to pay service tax and also paid the same. The Appellant had a bona fide belief that they are not liable to pay service tax on the expenses incurred towards sponsorship fee in FY 2016-17 in respect of IATA Canada as the event was organized in Geneva, Switzerland which is a non-taxable territory. Rule 6 of Place of Provision of Service Rules, 2012 is applicable in the instant case and hence, it is outside the levy of service tax. 7.2 We also find that the Appellant had a bona fide belief that being a software product company engaged in development of software products catering to the needs of the travel industry, no service tax was payable on the sale of software and as per the EULA, the appellant is selling the license along with perpetual right to use and it is primarily a sale of software on which they also paid the VAT, therefore, there was no intention to evade payment of service tax. On the service portion, the ....