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TMI Blog2014 (11) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) of the definition as considered by us above, the submission that the appellant’s service is correctly classifiable under BAS and not under ITSS in our view cannot be sustained. Therefore, we have to hold that appellant has not made out a prima facie case in this case on merits. Extended period of limitation - A show-cause notice has been issued beyond the normal period and in this case admittedly the appellant could have utilized the CENVAT credit of service tax paid as a receiver in respect of their liability to be discharged for their Indian activities or even in respect of some software which is being serviced by them. Therefore it may not be proper to take a view at this stage that extended period is applicable in view of the revenue neutral situation. Therefore, we take a view that appellants have not made out a case for complete waiver in respect of normal period. Cenvat Credit - Held that:- Credit availed by the appellant in respect of services provided by them to the units in SEZ. The learned counsel submits that retrospective amendment providing for availment of CENVAT credit on service provided to SEZ for the period in question before us was not available at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to market promote and sell licenses of the products in the territory; install or assist the customers with installation of the products; provide support for use of the product; make efforts to get annual renewal of licenses and take full responsibility for collection of fees. It is his submission that from the above clause of the agreement, it is quite clear that appellants service does not get covered under clause 5 of the definition of ITSS mentioned above. On the other hand, learned AR refers to the agreement that any principal abroad viz., M/s. BETA CAE Systems, SA, according to this agreement, the distributor would be responsible for marketing the licensed programmes of the licensor, maintain sales and support organization, interact with end-users for a contracts, end-user inquires, sub-license enquiries with end-user. It also provides that distributor shall have end-users of the licensed programme to execute an end-user sub-license agreement which is preapproved by the licensor. It is his submission that the clause relating to sub-license shows that the appellant is actually distributing the end-user license of the software and is providing sub-license for this p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II and the challenge to the legislative competency of Parliament is totally unsustainable. All standardised software are not like any other product or goods. There is no element of sales when it is supplied to the end user by means of EULA. Along with the Standardised Software a key (an alpha numerical code) is provided to the end user to activate the software by registering the same with the original manufacturer through the internet. Standardised Software Licence licensed and available across the shelf or downloaded from internet is not a finished product, rather updates are given by the original manufacturer (Microsoft or Symantec) to the end user for an agreed period. Updates are supplied to the end user through the internet for a period specified in the license. Once the software is registered with the original manufacturer through the internet using the key supplied by the original manufacturer, (the key is nothing but an alpha numerical code) the terms of license are agreed upon and installed for use in the specific computer. 3.2 The original manufacturer, who creates the software, only licenses the software for the private use of the end user subject to the terms and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant has not been implemented. In such circumstances, the question that arises is whether the appellant is covered by Clause (v) of the definition or not. As can be seen from the definition reproduced above, the definition covers provision of right to use ITS for commercial exploitation including right to reproduce, distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products. In this case there is no dispute that what is being transferred by the foreign principals to the Indian customers is only a right to use their software and the customers in India are required to agree and accept terms and conditions electronically. Therefore what the appellant are distributing or providing to Indian customers is only right to use information technology software for commercial exploitation. There is no submission that the customers did not use this software for business purposes and no such claim has been made. Therefore, in our opinion, prima facie, the appellants have provided a service and the transaction cannot be considered as a sale. It is now settled law that only when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enance charges (AMC) and ensuring that customers continues to renew the software only. He submits that there is no agreement between the customer in India and appellant and the end-user agreement is also not between the customer in India and the appellant. In such a situation, it cannot be said that appellant is providing the right to use information technology software supplied electronically. When the appellant is not at all providing the right to use information technology software always according to their submission and in the absence of any evidence to the contrary collected/gathered by the Revenue and brought on record, we have to take a view that appellant has made out a prima facie case in their favour and on this ground the demand cannot be sustained. 4.1 The last category under which the demand has been made is CENVAT credit availed by the appellant in respect of services provided by them to the units in SEZ. The learned counsel submits that retrospective amendment providing for availment of CENVAT credit on service provided to SEZ for the period in question before us was not available at the time when the Commissioner considered the issue and now according to the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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