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14.1 Learned AR for the Revenue reiterating the findings of the learned Commissioner submitted that the activities carried out by the appellant viz. development, adaptation, upgradation, enhancement, implementation, design & programming and other similar services related to information technology services as per requirement of the customers attract service tax under the category of ITSS provided to their clients as per Section 65(105)(zzzze) of the Finance Act, 1994. He has submitted that in view of the amendments in 'Management, Maintenance or Repair Services' w.e.f. 16/05/2008, the Information Technology Software Service is to be considered as "properties". The activity of designing, developing or any other service primarily in relation to operation of computer system, i.e. information technology software only, when transferred to a media would fall within the meaning of manufacture under Section 2(f) of the Central Excise Act, 1944 and classifiable as excisable goods under Chapter 8523 of CETA, 1985 depending on the nature of the media such as discs, tapes, solid state non-volatile storage devices etc. He has submitted that in the present case, the activity of developing, adaptation, upgradation, enhancement, implementation, design ST/343/2011, ST/2559/2011, ST/2560/2011, ST/26441/2013, ST/21868/2014, ST/20119/2017 & programming etc. of the customized software undertaken by the appellants fall within the meaning of the Information Technology Services as defined in Explanation (b) of the definition of BAS which is distinct from the activity that amount to manufacture under Section 2(f) of Central Excise Act. He has submitted that an activity amounting to manufacture of excisable goods would also to be liable to service tax when the same gets classified within any of the taxable services less than BAS unless and otherwise specifically excluded from the scope of levy of service tax under that particular category of service. 14.2 The service tax has been demanded in the present case under the taxable category of "ITSS". The activity of generating of application software by taking into account various engineering inputs provided by customers and process consultants, based on the imported DCS software modules, which are specific to each other and sub-modules of which are configured on job work basis to meet each of the customer's requirements would amount to customization of software. He has contended that certain standard software packages are brought, modified or upgraded to suit the requirement of the customers. The modification may be to adapt to the need of the customers or upgradation or enhancement or implementation of the software. Packaged or canned software intended for multiple uses, though considered as excisable goods, the sale/supply of ST/343/2011, ST/2559/2011, ST/2560/2011, ST/26441/2013, ST/21868/2014, ST/20119/2017 which will also be considered as service being rendered and the consideration paid or payable for transfer of the right to use such packaged or canned software is subjected to service tax. In support, the Ld. AR has referred to the judgment of the Hon'ble Supreme Court in the case of CC,CE&ST Vs. Suzlon Energy Limited (Judgement dt. 10/04/2023), Yokogawa India Ltd. Vs. CC, Bangalore [2008(226) ELT 474 (Tri. Bang.)], Infotech Software Dealers Association Vs. UOI & Others [2010(8) TMI 13 (HC of Madras)] and Infosys Limited Vs. CCE &ST [2018(4) TMI 150 (CESTAT, Bangalore)].

Definition of Information Technology Software under the Finance Act, 1994.
Section 65(53a):
"Information Technology Software" means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment.
Section 65(105)(zzzze): Taxable service means any service provided or to be provided, to any person, by any other person in relation to information technology software including

22. The claim of the Revenue is that after introduction of the levy of service tax on 'Information Technology Software service' w.e.f 16.5.2008, the imported software, customized and supplied with DCS by the appellant is a 'service' as defined under Section65(53a) read with taxable category of Section 65(105)(zzzze) of the Finance Act,1994, and accordingly leviable to service tax.

23. It is to be noted that even after introduction of the service tax on the 'Information Technology software Service' more or less on similar line of definition of 'Information Technology software' already present under supplementary note of Chapter 85 of CETA, 1985 and the classification of the said software under Chapter Heading 8523 of CETA, 1985 continued in the Central Excise Tariff Act without any amendment or alteration to the same. In other words, the intention of the Legislature was continuation of levy of excise duty on the activity of manufacture and sale of Information Technology software and also levy service tax for providing Information Technology Software ST/343/2011, ST/2559/2011, ST/2560/2011, ST/26441/2013, ST/21868/2014, ST/20119/2017 service. Thus, the precise question is, whether the same activity of supply/sale of customized software by the Appellant could be chargeable to Excise duty and/or also service tax post 16.5.2008 as admittedly there is no change in the facts and circumstances of the case.

28. The learned Commissioner in the impugned order, confirming the demand adopted a different approach. He has accepted the proposition of law that 'information technology software' sold/supplied in a recorded media is excisable goods. However, referring to the definition of BAS prior to and after 16.5.2008, and scope of clause (b) to the inserted Explanation to definition of 'Management, Maintenance or Repair Service', held that 'Information Technology Software Service' is to be considered as 'properties'. It is his reasoning that if 'Information Technology Software' was to be considered as 'goods' only post 16.5.2008, there was no need to specifically provide in the said ST/343/2011, ST/2559/2011, ST/2560/2011, ST/26441/2013, ST/21868/2014, ST/20119/2017 Explanation that "properties" include information technology software; thereby rejected the contention of the appellant that when a particular item considered as sale/supply of goods, it could not be amenable to service tax having been rendered in relation to the said sale/supply of goods. Further, referring to the definition of Information Technology Software service, the learned Commissioner came to the conclusion that the activities undertaken by the appellant viz. generating application software by taking into account the various engineering inputs provided by the customers and process consultants based on the imported DCS software modules which are specific to each other and the subject modules of which are configured on job work basis to meet each of the customers' requirements, would amount to customization of software. The modifications may be adopted to the need of the customer or upgradation or enhancement or implementation of the software. Thus, the activity of customizing the software would fall within the meaning of Information Technology Software Service and gets classified under taxable category of Information Technology Software Service.