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TMI Blog2017 (5) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... elecom operators on a revenue sharing model - the impugned order did not legally justify the tax liability of the appellant under the category of “Business Auxiliary Service”. Management, Maintenance or Repair Services - the appellant shall develop, operate and maintain online sites of BCCL - Revenue entertained a view that the appellants were engaged in management, maintenance and repair of software and accordingly, are liable to pay service tax - Held that: - A plain reading of the agreement and the scope of the activities by the appellant, will indicate that they are not involved in any software, repair or maintenance. They are involved in a comprehensive service of designing and managing the online publication for BCCL - the website per se is not a computer software - On careful consideration of the scope of activities undertaken by the appellant, we are of the considered view that the same will not fall under the scope of management/maintenance/repair of software. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No.3578/2012 - Final Order No.56479/2016 - Dated:- 15-12-2016 - Shri S.K. Mohanty, Member (Judicial) and Shri B. Ravichandran, Member (Tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany of Times of India Group and is, inter alia, engaged in the business of printing and publishing various newspapers. BCCL also owns online publications, which are internet based version of print publications. BCCL primarily is in the print media and does not have the requisite expertise, technology, software, etc. for operating and managing online publication and online sites and accordingly, entered into an agreement for Information Technology services with the appellant. In terms of the said agreement, the appellant shall provide the information technology services in relation to online publication and online sites including design, look, feel and content of such online publication and online sites. The appellant shall be responsible for development, operation and maintenance of the online sites, technical operation of the online sites including all related equipments, hardware and software systems and maintenance of adequate technical equipments, hardware and software systems to ensure uninterrupted availability of the online publication and online sites. 3. The Revenue entertained a view that the activities of the appellant in pursuant of the said contract is liable to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e involved in providing Information Technology Service in relation to online publication and online sites for BCCL. Such service cannot be considered as maintenance and repair of software. Even otherwise maintenance of software has been made taxable only w.e.f. 16.05.2008. The contract entered into by the appellant with BCCL is not a maintenance or repair contract but for whole package of services starting from design of the website and uninterrupted operation of the said website, for public access. (e) It is also contended that designing, operating and maintaining a website cannot be equated to maintenance and repair of software. Websites are nothing but collection of data whereas software is a coded system, which forms basis for display of the decided data in the website. (f) The demand is also contested on the question of time bar. There is no basis for alleging fraud, suppression, etc. against the appellant. The demands, presently made are based on properly maintained records of the appellant. The issue of tax liability under these two categories involves pure question of interpretation and there could be no deliberate intention to evade payment of service tax on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant shall provide the content to the telecom service provider to enable the users to avail the service through mobile telephony. The appellant shall provide necessary support for uninterrupted supply of service with reference to the content provided. The nature of contents are listed in the agreement under the heading Description of the Services . It stipulates that the appellant, being official representative of Zoom T.V., will provide the telecom operator video content, promos, movie trailers, etc. The Zoom TV will be given adequate credit for the video content along with the logo. The telecom operator shall promote the Zoom TV log wherever possible in their promotional activities. The appellants have received consideration in a revenue sharing arrangement. 25% of net revenue received by the telecom company is paid to the appellant. 10. The Original Authority held that the appellants provided Business Auxiliary Service to the telecom companies. His findings are as below:- 19.2 It is seen that the short access code (58888/8888) is widely publicized by the assessee on its website www.indiatimes.com. The same is also pupolarised through advertisements in newspapers inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , they are developing the contents and supplying the same to the telecom operators on a revenue sharing model. It is clear that the consideration received in such revenue sharing model cannot fall under either of the two categories mentioned above. In such situation, we find that the impugned order did not legally justify the tax liability of the appellant under the category of Business Auxiliary Service . 12. On the second issue, we note that the appellants were subjected to the service tax levy under management, maintenance or repair service . The statutory provisions are as below:- Management, Maintenance or Repair Services are defined under Section 65(64) of the Act as under:- Position w.e.f. 01.07.2003 to 15.06.2005 Maintenance or repair means any service provided by (iii) any person under a maintenance contract or agreement; or (iv)a manufacturer or any person authorized by him, in relation to a maintenance or repair or servicing of any goods or equipment, excluding motor vehicles. Section 65(64) Motor Vehicle has the meaning assigned to it in clause (28) of Section 2 of the Motor Vehicle Act, 1988 [Section 65(73)] Position w.e.f. 16.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant is to provide complete information technology service in relation to the online publications and maintenance of websites for such online publications for and on behalf of BCCL. The appellants received consideration for such services. 15. The Original Authority reproduced the statutory provisions for MMR services and thereafter simply concluded as below:- 20.3 From the above, it is clear that management, maintenance and repair of software is covered under MMR services. CBEC Circular No.81/2/2005-ST dated 07.10.2005 also clarified that any service in relation to maintenance or repair or servicing of software would be leviable to service tax under Section 65(105) (zzg) read with Section 65(64) of the Finance Act, 1994. In this case the web sites may be hosted on the servers/ equipments of the noticee but the websites were owned/belonging to the clients. Thus the maintenance of the websites would be taxable under the taxable category of Management, Maintenance or Repair Service 16. We find there is no detailed examination of the scope of service rendered by the appellants and various technical issues as submitted by the appellant. The Original Authority simp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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