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Explanation - For removal of doubts, it is hereby declared that for the purpose of this clause,-

   (a)     "good" includes computer software;
   (b)     "properties"      includes      Information           technology
           software.

Thus it is seen from the definition that "maintenance and repair service" includes reconditioning or restoration, or servicing of any goods or equipments. In the case of "Software maintenances" actually the services offered in most of the cases is "software up-gradation and its smooth functioning. The party in their defence reply dated 15.09.2008 have themselves admitted that they provide services for (1) Installation or implementation of customized software; (2) Customization of software to be installed; (3) Development of patches or intermediary software which enable the main software to run smoothly onto the operating system environment of the client; (4) Up-gradation of installed software with newer versions, Service Tax Appeal No.55382 & 56090 of 2013 and (5) Enhancement or modification of software by either opening or closing some of the inbuilt features or reports of the software. Therefore I find that by their own admission the services being provided by them are classifiable under "repair and maintenance services" and not "information technology services". The party in their defence has submitted that software maintenance is not covered under maintenance of goods, however I find that definition of the goods has been expanded to include computer software as well. Consequently maintenance and repair of computer software would be leviable to service tax under this category.

5. We have considered the submissions made by Learned Counsel for the parties and have perused the record. For the facility of reference, paragraphs 6, 7 and 8 of the decision rendered by High Court of Madras in Kasturi and Sons is reproduced for the facility of reference :

6. Admittedly, it is under the Finance Act, 2007, with effect from 1-6-2007, the term 'goods' has been expressly made to include computer software. But earlier in the Finance Act, 2003 in which the terms, 'business auxiliary service' and 'maintenance or service' were introduced for the first time. There was specific exclusion of information technology service including maintenance of computer software from the purview of business auxiliary service. The term 'business auxiliary service' as introduced in the Finance Act, 2003 with explanation contained therein is as follows :

8. Therefore, on fact, it is clear that till the advent of the Finance Act, 2007, the information technology which included maintenance of computer software, had been outside the purview of 'business auxiliary service', especially under Section 65 and the term, 'goods' in the Finance Act, 2007 has included 'computer software' under Section 65(105)(zzg). However, under the impugned circular the second respondent placed reliance on the judgment of the Supreme Court in Tata Consultancy Service v. State of Andhra Pradesh [2005) 1 SCC 308] to conclude that software being goods, any service relating to maintenance, repairing and servicing of the same is also liable for service tax. The Supreme Court in Service Tax Appeal No.55382 & 56090 of 2013 that case decided about the term 'goods' in the light of Andhra Pradesh General Sales Tax Act and farmed the question as follows :

"For the removal of doubts, it is hereby declared that, for the purposes of this clause, "goods" includes "computer software".

This explanation was amended w.e.f. 16-5-2008 as follows :-

"For the removal of doubts, it is hereby declared that for the purposes of this clause -

(a) "goods" includes "computer software";

(b) "properties" includes "information technology software", (underlining added) In this context, we think, we must also reproduce the full text of Section 65(64) as it stands post-16-5-2008.