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TMI Blog2016 (3) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... n technology software' is essential for smooth running of the business activities of the user. Thus the clients of the appellant in this case would be users of ‘information technology software' and hence any maintenance of that software would be taxable only after 16 th May 2008 as decided by this Tribunal in re SAP India Pvt. Ltd. The demand under ‘maintenance or repair services' in the impugned order does not survive. - Demand set aside - Decided in favor of assessee. - Appeal No: ST/470/2012, Application No: ST/MA(Ors.)-94129/2015 - Final Order No. A/85678/2016-WZB/STB and Misc. Order No. M/85679/2016-WZB/STB - Dated:- 10-2-2016 - M V Ravindran, Member (J) And C J Mathew, Member (T) For the Appellant : Shri Prasad Paranjape, Adv For the Respondent : Shri K.S. Mishra Addl. Commissioner (AR) ORDER Per C J Mathew Pursuant to order-in-original no 46/PIII/ST/COMMR/2011-12 dated 21 st March 2012, M/s Persistent Systems Ltd is before us seeking to quash the demand of tax and interest therein, appropriation of the amounts paid by the appellant before issue of the show cause notice, and imposition of penalties under section 77 and 78 of Finance Act, 1994. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as all the circulars and decisions hitherto existing related to computer software' those were not applicable to the activity performed by the service provider in re SAP India Pvt Ltd. 6. Learned Authorized Representative places reliance on the circular no 81/2/2005-ST dated 7 th October 2005 of Central Board of Excise Customs that superseded no 70/19/2003-ST dated 17 th December 2003; the clarification in the latter that maintenance of software was not taxable under section 65(105)(zzg) of Finance Act, 1994 was held to be no longer valid after the decision of the Hon'ble Supreme Court in Tata Consultancy v State of Andhra Pradesh [2004 (178) ELT 22 (SC)] holding that canned' computer software is goods. Further reliance was placed on the decision of the Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd v Union of India [2006 (2) STR 161 (SC)] . 7. We note that the demand has been made in connection with provision of maintenance or repair service' till December 2007 and that the activity that has been held to be taxable in the impugned order is that of maintenance of software installed at the overseas sites of their clients. That it is maintenance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property' only when information technology software' was made taxable prompted this Tribunal to draw a distinction between the two and hold that the activities of M/s SAP India Pvt. Ltd, which is distinguishable from the activities of the appellant before us only by the clients being overseas, was liable to tax from 16 th May 2008. 10. We are, therefore, required to arbitrate on the rival contentions that the appellant maintains information technology software' or that the appellant maintains computer software'. As maintenance of goods,' which, as per Explanation extracted supra, includes computer software', existed from an earlier date, contention of Revenue would render the appellant taxable for the period in dispute. Revenue relies upon the superseding circular no. 81/2/2005-ST dated 7 th October 2005 of Central Board of Excise Customs which was issued consequent to the decision of the Hon'ble Supreme Court in re Tata Consultancy cited supra. 11. The finely tuned calibration that is demonstrated by the Supreme Legislature in the taxing of various services since 1994 is patently not reflected in the manner in which tax collection is sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly held that unbranded software was undoubtedly intellectual property . Mr. Sorabjee submitted that the High Court fell in error in making a distinction between branded and unbranded software and erred in holding that branded software was goods . We are in agreement with Mr. Sorabjee when he contends that there is no distinction between branded and unbranded software. However, we find no error in the High Court holding that branded software is goods. In both cases, the software is capable of being abstracted, consumed and use. In both cases the software can be transmitted, transferred, delivered, stored, possessed etc. Thus even unbranded software, when it is marketed/sold, may be goods. We, however, are not dealing with this aspect and express no opinion thereon because in case of unbranded software other questions like situs of contract of sale and/or whether the contract is a service contract may arise. The decision of the Hon'ble High Court for coverage of canned software' alone has been concurred with in re Tata Consultancy. 13. The articulation of legislative intent sought to be derived from this decision by the Central Board of Excise Customs may not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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