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2019 (2) TMI 1106 - AT - Service TaxBenefit of N/N. 16/2004 dated 10.09.2004 - services provided as Enterprise Resource Planning (ERP) - case of the department is that since the appellant are registered as Commercial Coaching or Training Service provider the said service is not eligible for exemption under N/N. 16/2004-ST - Held that - The appellant have provided ERP software service. ERP software service is explicitly exempted under N/N. 16/2004-ST dated 10.09.2004. The specific service ERP System provided by a management consultant in connection with management of any organization in any manner is exempted. This notification itself endorses that the service of ERP software system is part and parcel of Management Consultancy Service. The only lapse on the part of the appellant is that they have not got the service i.e. Management Consultancy service added in the registration. Only because of this reason it cannot be said that ERP software system service is not covered under Commercial Training or Coaching Services whether the appellant have applied for registration or otherwise in their classification of service will not change the position - ERP Software system service provided by the appellant is clearly eligible for exemption under Notification No. 16/2004-ST dated 10.09.2004. Appeal allowed - decided in favor of appellant.
Issues:
1. Applicability of exemption Notification No. 16/2004 on services provided by the appellant. 2. Validity of penalty imposed under sections 76, 77, and 78. 3. Classification of service provided by the appellant as Commercial Training or Coaching Services. Analysis: 1. Applicability of Exemption Notification No. 16/2004: The case revolved around the appellant, registered as a service provider under 'Commercial Training or Coaching Services,' who provided Enterprise Resource Planning (ERP) software system services. The appellant had availed exemption under Notification No. 16/2004 but was denied by the department. The Tribunal analyzed the notification and concluded that the specific service of ERP system provided by a management consultant in connection with organization management was exempted. Despite the appellant not having the Management Consultancy service added in their registration, the Tribunal held that the ERP software system service was eligible for exemption under the notification. The demand raised by the department was deemed incorrect, and the impugned order was set aside, allowing the appeal. 2. Validity of Penalty Imposed: The appellant sought to set aside the penalties imposed under sections 76, 77, and 78, invoking Section 80 of the Finance Act. They relied on various judgments to support their argument. However, the Tribunal did not delve into this issue in detail in the judgment, as the main focus was on the applicability of the exemption notification and the classification of services provided by the appellant. 3. Classification of Service Provided: The appellant contended that they provided ERP software system services in addition to Commercial Training or Coaching Services. The Tribunal acknowledged that the appellant indeed provided ERP software system services, which were explicitly exempted under Notification No. 16/2004. The Tribunal clarified that the service of ERP software system was part of Management Consultancy Service and, despite the appellant's registration not explicitly mentioning Management Consultancy service, the service provided was eligible for the exemption. The Tribunal held that the service provided by the appellant was not solely 'Commercial Training or Coaching Services' and that the demand denying the exemption was incorrect. In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The judgment emphasized the specific exemption under Notification No. 16/2004 for ERP software system services provided by a management consultant, irrespective of the appellant's registration classification.
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