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TMI Blog2023 (8) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasoning adopted by CESTAT. However, in the proceedings pursuant to remand, it will be open for the assessee to show that an exemption was available under subsection (2) of Section 26 of the SEZ Act. It is also held that octroi charges are in the nature of levy for transportation of goods. Therefore, octroi charges cannot be a part of the value of the taxable services. However, a remand was ordered to enable the assessee to produce evidence regarding the amounts paid towards octroi charges. Appeal dismissed. - Abhay S. Oka And Sanjay Karol , JJ. For the Appellant : Mr. Vipin Jain, Adv. Mr. Mahesh Agarwal, Adv. Mr. Girish Raman, Adv. Mr. Vishal Agarwal, Adv. Ms. Sayaree Basu Mallik, Adv. Mr. Karan Verma, Adv. Mr. Abhinabh Garg, Adv. Ms. Tuhina, Adv. Mr. K. Ajit Singh, Adv. Mr. E. C. Agrawala, AOR Mr. V.C. Bharathi, Adv. Mr. Mukesh Kumar Maroria, AOR Mr. H.R. Rao, Adv. Mr. A.K. Kaul, Adv. Ms. Nisha Bagchi, Adv. Mr. Prashant Singh (i), Adv. For the Respondent : Mr. V.C. Bharathi, Adv. Mr. Mukesh Kumar Maroria, AOR Mr. H.R. Rao, Adv. Mr. A.K. Kaul, Adv. Ms. Nisha Bagchi, Adv. Mr. Prashant Singh (i), Adv. Mr. Vipin Jain, Adv. Mr. Mahesh Agarwal, Adv. Mr. Girish Raman, Adv. Mr. Vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined under Section 65 (53a) of the Finance Act. Thirdly, it was held that the value of the computer hardware items consumed for providing the services is required to be included in the valuation of the respective services in terms of Section 67 of the Finance Act. Consequential orders regarding payment of interest and penalty were passed by the Commissioner. 4. Being aggrieved by the said OrderinOriginal, the assessee preferred an appeal before the CESTAT. By the impugned judgment dated 18th September 2018, CESTAT held that the services subject matter of dispute were classifiable under the category of Information Technology Software with effect from 16th May 2008 and for the earlier period up to 15th May 2008, the same services were classifiable under the category of Intellectual Property Service . The Tribunal held that the show cause notice dated 19th October 2019 covering the period up to 16th May 2008 was not justified. However, the Tribunal, for the period on and after 16th May 2008 passed a limited order of remand. 5. Civil Appeal No. 4007 of 2019 has been preferred by the Revenue against the same order and Civil Appeal No. 7155 of 2019 has been filed by the assessee. SUB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that CESTAT committed an error in upholding the demand confirmed by the respondent for the period from 16th May 2008 on the sale of standardised software and resale of the hardware. OUR VIEW APPEAL OF REVENUE 9. We have given careful consideration to the submissions. Firstly, we deal with the appeal preferred by the Revenue. The appeal is confined to the first show cause notice. The first show cause notice covers the period from 1st April 2004 to 31st March 2009. The demand under the said show cause notice dated 19th October 2009 was for taxable service of Management, Maintenance and Repair . The CESTAT found that the service of transfer of intellectual property rights was classifiable under the category of Intellectual Property Service till 16th May 2008 and was taxable in terms of Section 65(105)(zzr) of the Finance Act. In the Union Budget of 200809, a new service under the head Information Technology Software was defined separately under Section 65(53a) of the Finance Act. The said service was made taxable in terms of Section 65(105) (zzzze). Thus, the transfer of the right to use the software was covered by the service classifiable as Information Technology Software with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articular transactions, service tax was payable under the classification mentioned in the show cause notices. After having perused the findings of CESTAT, we find that the findings rendered by the Tribunal call for no interference. The findings are based on careful consideration of the factual and legal aspects. 12. In paragraph no. 10.16, CESTAT dealt with the argument that an exemption was available to the assessee under SEZ Act in respect of services supplied to SEZ units. Subsection (2) of Section 26 of SEZ Act provides that the Central Government may prescribe the manner in which and the terms and conditions subject to which exemptions shall be granted to a developer or entrepreneur covered by subsection (1) of Section 26. Clause (e) of subsection (1) of Section 26 refers to exemption from service tax under the Finance Act on taxable services provided to a developer or unit to carry on authorised operations in SEZ. Under Subsection (1) of Section 51, SEZ Act prevails over other enactments which are inconsistent to the provisions contained therein. Thus, only when by exercising the power under subsection (2) of Section 26 of SEZ Act, an exemption is granted by the Central Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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