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TMI Blog2014 (8) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. Therefore, they appear to be goods, which can be marketed or sold. Inasmuch as the appellant has discharged the sales tax/VAT liability on such software, there is merit in the contention of the appellant that liability to pay service tax does not arise on a sale transaction. - prima facie case is in favor of assessee - stay granted. Refund for services provided to the SEZ unit - Held that:- t is clear that exemption has to be claimed in the manner prescribed and the manner has been provided vide Notification No. 9/2009-ST dated 3-4-2009. In the present case it is an admitted fact that the said procedure has not been followed. Therefore, prima facie in the absence of compliance to the procedure prescribed, the appellant cannot claim exemption from levy of service tax. - assessee directed to make pre-deposit of ₹ 1.40 crore for services provided in SEZ - stay granted partly. - ST/85707/14 - Stay Order No. S/673/2014-WZB/C-I(CSTB) - Dated:- 7-7-2014 - P R Chandrasekharan And Ramesh Nair, JJ. For the Appellant : Mr. A.R. Krishnan, Adv. For the Respondent : Mr. P.M. Saleem, Comm. (AR) PER : P R Chandrasekharan The appeal and stay petition are directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Consultant submits that there are four show-cause notices covering the period 01/04/2004 to 31/03/2009, 01/04/2009 to 31/03/2010, 01/04/2010 to 31/03/2011 and 01/04/2011 to 31/03/2013. As regards the first show-cause notice, the proposal in the notice was that the services rendered by the appellant falls under the category of maintenance and repair services , whereas the adjudicating authority has confirmed the demand under the category of Intellectual Property Rights Services (IPR) for the period prior to 15/05/2008 and under information technology services with effect from 16/05/2008. He also points out that during the previous round of adjudication, the adjudicating authority had confirmed the demand under maintenance and repair services' up to 15/05/2008 and under information technology service' from 16/05/2008. In other words, the adjudicating authority, in the second round of litigation, has taken a completely different stand proposing to classify the services as Intellectual Property Rights Service prior to 16.5.2008. The appellant was never put to notice about the classification under Intellectual Property Rights Service at all either by way of a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is his contention that the demand of service tax under the category of Information Technology Service post 16/05/2008 would not survive. He also relies on the decision of Apex Court [2004 (178) ELT 22 (SC)] in the case of Tata Consultancy Services Ltd. in support of above contention. In the said decision, the hon'ble apex court held that. - Thus a transaction sale of computer software is clearly a sale of goods within the meaning of the term as defined in the said Act. The term all materials, articles and commodities includes both tangibleand intangible/incorporeal property which is capable of abstraction, consumption and use and which can be transmitted, transferred, delivered, stored, possessed etc. The software programmes have all these attributes. A software may be intellectual property but such personal intellectual property contained in a medium is bought and sold. It is an article of value. It is sold in various forms like - floppies, disks, CD-ROMs, punch cards, magnetic tapes, etc. Each one of the mediums in which the intellectual property is contained is a marketable commodity. 3.3 It is also his contention that the appellant had discharged the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn, development and supply of software and therefore, service tax is rightly chargeable on the in-house developed software post 16/05/2008. As regards the service tax liability on the services rendered to SEZ units, the Commissioner (AR) submits that the appellant has not followed the prescribed procedure. Therefore, the appellant cannot claim the benefit of exemption as the law envisages payment of tax first and claiming the refund subsequently by the recipient of service. If the procedure prescribed under the law is not complied with, the benefit cannot be claimed. In these circumstances, he pleads for putting the appellant to terms. 5. We have carefully considered the submissions made by both the sides. 5.1 As far as the first show-cause notice is concerned, the service tax demand is for an amount of ₹ 61.34 crore and is for the period 2004-05 to 2008-09. The proposal in the show-cause notice was for classification of the services rendered under maintenance and repair services whereas in the impugned order, the demand has been confirmed under IPR services for the period prior to 16/05/2008 and under information technology services post 16/05/2008. Thus, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted or sold. Inasmuch as the appellant has discharged the sales tax/VAT liability on such software, there is merit in the contention of the appellant that liability to pay service tax does not arise on a sale transaction. 5.3 As regards the services provided to the SEZ unit involving a service tax demand of ₹ 1,40,08,000/- the law prescribes a refund mechanism for operationalising the exemption from service tax. Section 26 of the SEZ Act, 2005 reads as follows: 26. (1) Subject to the provisions of sub-section (2), every Developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions, namely: - (a) exemption from any duty of customs, under the Customs Act, 1962 or the Custom Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or service provided in, a Special Economic Zone or a Unit, to carry on the authorised operations by the Developer or entrepreneur; (b) exemption from any duty of customs, under the Customs Act, 1962 or the Customs Tariff Act, 1975 or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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