2009 (5) TMI 93 - AT - Service Tax

Demand confirmed on the ground that appellant were carrying out maintenance and repair services in respect of computer software, during the period 9-7-04 to 9-9-04 - C.B.E. & C. Circular No.70/19/2003-ST., dated 17-12-2003, clarifying that service tax is not leviable on the activity of maintenance of computer software as Repair and Maintenance Service since maintenance of computer software is not of tangible goods but of intangible program software in installed condition - Although the Circular has been subsequently withdrawn, during the period in dispute in the present case, this circular was very much in force stay granted

Summary

The Appellate Tribunal CESTAT, Chennai heard a case regarding waiver of pre-deposit of service tax and penalties for maintenance and repair services of computer software. The applicants were confirmed to owe Rs. 84,568 in service tax and penalties under various sections of the Finance Act, 1994. The Tribunal found a strong prima facie case in favor of the applicants based on a circular clarifying that service tax is not applicable to maintenance of computer software as it involves intangible program software. The Tribunal waived the pre-deposit and stayed the recovery of the service tax and penalties pending the appeal.