2015 (11) TMI 718 - AT - Service Tax

Liability of Service Tax Business Auxiliary Service - Services of marketing and promotion of Abacus CRS Software in India Revenue contends that services rendered fall under BAS - Held That - Services provided by assessees during 01.07.2003 to 01.05.2006 fall outside the ambit of BAS - Decision made in the case of Acquire Services Pvt Ltd vs CST, Delhi 2014 (11) TMI 168 - CESTAT NEW DELHI is squarely applicable Impugned order set aside - Decided in favour of assessee.

Summary

Issues:
1. Whether the appellants provided Business Auxiliary Service without paying appropriate service tax.
2. Whether the services provided by the appellants amount to export of services under the 2005 Rules.

Analysis:
1. The case involved demands confirmed with interest and penalties imposed on the appellants for allegedly not paying the appropriate service tax while providing Business Auxiliary Service (BAS) during the period from July 2003 to March 2010. The appellants were engaged in marketing and promoting Computer Reservation System (CRS) Software by a foreign entity in India. The Revenue contended that the activity undertaken by the appellants constituted BAS.

2. The Tribunal referred to a previous decision in the case of M/s Acquire Services Pvt Ltd vs CST, Delhi, where a similar demand was set aside. The Tribunal in that case held that the services provided by the assessees, involving marketing of CRS services owned by overseas entities in India through computer data processing, did not fall within the ambit of BAS as defined, due to the exclusion of computer data processing as a component. The Tribunal also discussed the issue of whether the services provided amounted to export of services under the 2005 Rules.

3. Citing decisions from previous cases, the Tribunal concluded that the services provided by the appellants fell outside the scope of BAS for the period from July 2003 to May 2006. Additionally, both prior and subsequent to May 2006, covering the entire periods in question, the appellants were found to be entitled to the benefits under the Export of Service Rules, 2005. Consequently, the appeals filed by the appellants were allowed based on the Tribunal's decision and the impugned orders were set aside.

In summary, the Tribunal ruled in favor of the appellants, holding that the services provided did not amount to BAS and that the appellants were entitled to benefits under the Export of Service Rules, 2005. The decision was based on the interpretation of the nature of services provided by the appellants in marketing and promoting CRS software, which involved computer data processing and fell outside the scope of BAS.