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TMI Blog2023 (8) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... tted in the Order in Original that the appellant has installed a common server and implemented SAP in the premises of BPLSL for use by the appellant for access and retrieving data from the common server with the aid of SAP software for accounting and other purposes through international lease lines. Hence it is clear that the activity rendered by the appellant is basically related to manipulation of data and not merely the inter connection of one or more computers or the access or retrieval of data - the classification of the service under dispute as a computer network service is not correct. The services are correctly classifiable under Information Technology Software services which have been introduced only with effect from 16.5.2008. The nature of the services are such that it can be provided online from a remote location outside the taxable territory also. The service provided from a remote location outside the taxable territory, to recipients in India would be taxable under the reverse charge mechanism. The appellant has placed reliance of Hon ble Bangalore Tribunal s decision in the case of IBM INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE [ 2009 (4) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Computer Network Services / Online Information and Database Access or Retrieval Service , which are liable to pay service tax on the reverse charge mechanism basis. The appellant agreed that leased line services are classifiable under Computer Network Services from 2006 onwards and paid the service tax thereon. The same was duly recorded in para 11 of the SCN dated 19/10/2012 and para 9 of the impugned order. The appellant claimed that the activity relating to graphical tool, Microsoft license, SAP implementation, SAP maintenance, server depreciation, provision are classifiable under Information Technology Services only with effect from 16.5.2008, when the service was introduced and not during the period 2006, 2007 and 2008 upto 16.5.2008. Hence they are not liable to pay service tax during the subject period. However, it appeared to Revenue that the entire service activity including the preparatory activity of installation of server, implementation of SAP software, graphical tool for upgradation etc. and allowing the use of the said common server and SAP software available in the premises of M/s. BPL Sri Lanka by the noticee for manipulation of data through computer networ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Bench of the Tribunal in the case of IBM India Pvt. Ltd. Vs. Commissioner of Service Tax reported in 2010 (17) STR 317 (Tri. Bang.) wherein it was held that ERP implementation falls under the category of Information Technology Service only with effect from 16.5.2008. Hence they were not liable to service tax before this date and the allegations of suppression / deliberate attempt to evade duty holds no ground. Moreover, this matter has been in dispute for some time and hence the extended time limit cannot be invoked. He prayed that the impugned order may be set aside and the appeal allowed. 6. The learned ADC (AR) Smt. K. Komathi appearing for the Revenue has submitted that the appellant in this case had not only accessed the data but they also manipulated data according to their requirement and usage. However, the appellant had first received the data through the lease network lines and the manipulation of data received comes only at the next stage. Hence it is clear that the appellant has access to the data in the server installed in SAP through lease lines. Hence the amounts remitted to M/s. Bodyline in the name of charges for graphical tools, server depreciation, SAP im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2008, on-line information and data base access or retrieval means providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network . 2.1 As per section 65(36) of the Finance Act, read with section 2(1)(o) of the Information Technology Act, 2000, data means a representation of information, knowledge, facts, concepts or instructions which are being prepared or have been prepared in a formalized manner, and is intended to be processed, is being processed or has been processed in a computer system or computer network, and may be in any form (including computer print outs magnetic or optical storage media, punched cards, punched tapes) or stored internally on the memory of the computer. 2.2 As per section 65(33) of the Finance Act read with section 2(1)(v) of the Information Technology Act, 2000 information includes data, text, images, sounds, voice, codes, computer programmes, software and data bases or micro film or computer generated micro fiche . 2.3 As per section 65(39) of the Finance Act read with section 2(1)(4) of the Information Technology Act, 2000, electronic form with reference to information mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Software services which have been introduced only with effect from 16.5.2008. The nature of the services are such that it can be provided online from a remote location outside the taxable territory also. The service provided from a remote location outside the taxable territory, to recipients in India would be taxable under the reverse charge mechanism. 8.1 The appellant has placed reliance of Hon ble Bangalore Tribunal s decision in the case of IBM India (P) Ltd. Vs. CST 2010 (17) STR 317 (Tri. Bang.) wherein it was held that ERP implementation, which the appellant asserts is equivalent to the services rendered in the present case, falls under the category of Information Technology Software services only with effective from May 16, 2008. Prior to that date, it was excluded from the definition of consulting engineer service. Relevant portion is reproduced below; 7. In the present case, the ERP implementation service is definitely for use in furtherance of business and commerce and the service under dispute is for the implementation. So, implementation of the ERP services is specifically covered under the information technology service, which was effective only from 16- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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