Custom, Excise & Service Tax Tribunal
M/S Ntt Data Global Delivery Services ... vs Cst, Bangalore on 28 August, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Application(s) Involved: ST/Stay/640/2012 in ST/959/2012-DB Appeal involved ST/959/2012-DB (Arising out of the Order-in-Original No. 04/2012 dated 19.01.2012 passed by the Commissioner of Service tax, Bangalore) For Approval and Signature : HON'BLE SHRI S.S.KANG , VICE PRESIDENT HON'BLE SHRI B.S.V.MURTHY , TECHNICAL MEMBER M/s NTT DATA GLOBAL DELIVERY SERVICES LTD Appellant Versus CST, BANGALORE Respondent
Appearance:
Mr. Prasad Paranjape, Advocate For the Appellant Mr. A. K. Nigam, Addl. Commissioner (AR) For the Respondent CORAM:
HON'BLE SHRI S.S. KANG, VICE PRESIDENT HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER Date of Hearing: 28/08/2013 Date of Decision:28/08/2013 Final Order No. 26743/2013 Order Per : B. S. V. Murthy The appellant is engaged in the business of software development service to their clients as well as domestic customers. Service tax of Rs. 65,41,199/- has been demanded from the appellant on the ground that the appellant had received service from abroad and in the capacity of recipient, the appellant should discharge the liability during the period from April 2005 to January 2008 with interest. Penalties have also been imposed under various Sections of the Finance Act, 1994.
2. Learned counsel submits that out of the service tax demanded, an amount of Rs. 2,36,360/- towards the service tax liability related to various services other than implementation of Enterprise Resource Process (ERP) service which is the main activity of the appellant, has already been paid. As regards the ERP implementation service, he relies on the decision of the Tribunal in the case of IBM India Pvt. Ltd. vs. Commissioner of Servicxe Tax, Bangalore [2010 (17) S.T.R. 317 (Tri.-Bang.)] wherein it was held that ERP implementation service is correctly classified under the category of Information Technology Service and not under Management Consultant Service. He also submits that this decision was upheld by the Honble Supreme Court in the Civil Appeal Nos. 1703-05 of 2010 filed by Revenue as reported in 2010 (18) S.T.R. J137 (S.C.).
3. We find that as submitted by learned counsel, the issue is covered by decision of the Honble Supreme Court and therefore, the appellant has made out prima facie case for total waiver of pre-deposit of the dues.
4. At this stage, learned counsel submits that the issue itself can be decided finally since the Civil Appeal filed by Revenue on the same issue has been dismissed by the Honble Supreme Court. There is no dispute about the facts or nature of service rendered by the appellant as it is covered by the decision cited by learned counsel. Learned AR has no objection for disposing the appeal itself finally.
5.1. In view of the above, as far as the ERP implementation service is concerned, the impugned order is set aside and the appeal itself is allowed with consequential relief to the appellant.
5.2. As regards the balance demand of Rs. 2,36,360/- which has been paid, the appellant has admitted the liability. Learned counsel undertakes that interest dues which has not been deposited will be deposited by them within two months from today.
5.3. As regards penalties, he submits that the service tax has been paid as the service was received from abroad and the appellant was entitled to CENVAT credit of the entire amount of service tax paid by them and therefore, it cannot be said that there was an intention to evade payment of service tax. Since the appellant has accepted the liability, the provisions of Section 80 of the Finance Act may be applied and penalty may be waived. We find force in the arguments advanced by learned counsel. Taking into consideration of the facts and circumstances, we consider it appropriate that provisions of Section 80 of the Finance Act are to be invoked and the penalties are to be waived.
6. In the result, as regards ERP implementation service, the appeal is allowed. As regards admitted service tax liability which has already been paid by the applicant, the applicant is directed to deposit interest as mentioned above. Penalties are waived by invoking Section 80 of the Finance Act. The stay application as well as appeal are disposed of in above terms.
(Order dictated and pronounced in open court) (B.S.V. MURTHY) TECHNICAL MEMBER (S.S. KANG) VICE PRESIDENT /vc/