9911796707
TMI Blog2007 (5) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... like online data processing. Cad Cam designing, annual maintenance of SAP, etc. to their clients. They are project executors for SAP software provided by M/s. SAP AG and are license holders for SAP application and maintenance in India. The Revenue issued show cause notice to the appellants alleging that the services provided by the appellants in respect of ERP software system was chargeable to service tax for the period from time to time 1-3-2000 to 9-9-2004. By way of Notification No. 16/2004- ST dated 10-9-2004 taxable services provided to a client in respect of ERP software system by a management consultant was exempted from the whole of service tax leviable thereon. In the impugned order, the Commissioner has confirmed the demand of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and to recover interest cost because the annual maintenance fees are paid to SAP India at the beginning of the period and thereafter recovered from the affiliates. 2. Since the Central Government issued a Notification No. 16/2004-ST dated 10-9-2004 exempting taxable services provided to a client in respect of ERP software system by a management consultant from the service tax. The Revenue holds the view that prior to 10-9-2004 the services provided in respect of ERP software system was chargeable to service tax in the category of management consultant. In the show cause notice, suppression of facts alleged, therefore extended period was invoked. In the impugned order, the Commissioner has confirmed the proposal in the show cause notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or services received by the appellant which are used for providing output services by the appellant to the affiliates. It can never be said that the appellant used the annual maintenance service provided by SAP India for 5000 users when actually the affiliates are using the software for 3457 users. The finding of the Commissioner is perverse. 8. The appellant is not providing any consultancy, advice, or technical assistance relating to modification, rectification or upgradation or working system of the clients. 9. Notification No. 04/1999-ST dated 28-2-1999 exempted the taxable services provided to any person by a consulting engineer in relation to computer software from payment of whole of service tax leviable thereon. The notification e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking care of any engineering service in relation to computer software provided either as engineer or management consult ant, it became necessary for Government to issue Notification No. 16/2004-ST. Hence, the finding of the Commissioner that for the period prior to 10-9-2004, service provided by management consultant in relation to ERP software was taxable is clearly Incorrect. 12. The only basis for issuing the present show cause notice is the Notification No. 16/2004-S.T., dated 10-9-2004. The appellant was of the view that services provided in relation to ERP' software is exempt from service tax. The department was of the same view. The department initiated the enquiry only because of issue of Notification No. 16/2004-S.T., dated 10-9- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have gone through the records carefully. The point at which the issue is whether the appellant is rendering any management consultancy service and whether they are liable to pay service tax for the period mentioned in the show cause notice. The appellant M/s. Tata Technologies Limited have furnished an agreement dated 31-3-1997 whereby SAP India granted license to the appellants to use SAP or ERP software for 5000 users. It is seen that the appellant is nodal agency to act on behalf of the Tata group company. In simple words, in terms of agreement entered between SAP India and the appellant, SAP India grants a license to use SAP proprietary ERP software upon the terms and conditions set forth in the agreement. In fact, the said software ..... X X X X Extracts X X X X X X X X Extracts X X X X
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