The Supreme Court has found no reason to take up the review petition filed by the assessee. the review petition for listing the review. The two judge bench rejected the review petition filed by the assessee.
The case arose out of the demand of service tax from the assessee, 3i Infotech Ltd under Section 73 of the Finance Act, 1994.Commissioner of Service Tax, Mumbai II made adjudication on the four Show Cause Notices. The Commissioner had held that the services rendered by the assessee from 10th April 2004 up to 15th May 2008 in relation to software need to be classified under the category of “Intellectual Property Service” defined under Section 65 (55b) of the Finance Act. The SC had heard the matter and quashed the Show Cause notice and held that penalty under section 76 of the Goods and Service Tax ( GST Act ) shall not be levied based on Incorrect Mentioning of the Category of Service in the Show Cause Notice.
Assessee had contended before CESTAT that the software was purchased by the assessee from third parties and sold on payment of VAT and the hardware sold on payment of VAT will not be subject to service tax.Assesssee further contended that in view of subsection (2) of Section 26 of Special Economic Zones Act, 2005 exemption should be given to a supplies or to a developer or unit in SEZ. Assessee urged that in view of subsection (2) of Section 26 of Special Economic Zones Act, 2005 ( for short, ‘SEZ Act’ ), an exemption was available in the light of what is provided in the Special Economic Zone Rules, 2006
Revenue had contended before Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) that though the first show cause notice dated 19th October 2009 has been issued demanding service tax under the category of “Management, Maintenance and Repairs”, the assessee was always aware that in fact the demand was covered under the category “Intellectual Property Service”.
Revenue argued that in any case, only a part of the demand under the first show cause notice up to 15th May 2008 could have been held to be illegal and not for the subsequent period. The learned counsel appearing for the assessee supported the finding of CESTAT on the first show cause notice.
CESTAT had held that one of the conditions specified was that the exemption shall be provided by way of refund of service tax. Accordingly, during the entire period the service provider is not eligible for first stage exemption from payment of service tax. He was required to pay service tax and either the Special Economic Zone developer or the unit located in the Special Economic Zone could have claimed the exemption by way of refund of service tax.
CESTAT observed that the appellant had not produced any evidence to show that the services provided by them were only or partly consumed within the SEZ or outside. Thus, there is no dispute about the fact that said exemption is not available to the appellant during the relevant period. Since the Commissioner has not considered the matter on this aspect the issue needs to be remanded back to him for consideration of the exemption in respect of services supplied to SEZ unit/developers.” The two judge bench comprising Abhay S. Okha and Sanjay Karol rejected the review petition filed by the assessee..
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
