Samsung Required to Pay Service Tax for Importing Electronically Downloaded Software Under High Sea Sales Contract: CESTAT [Read Order]
The tribunal observed that High Sea Sales mean sales which are carried out when the goods which are being transported by a vessel are on the high seas at the time of sale.
![Samsung Required to Pay Service Tax for Importing Electronically Downloaded Software Under High Sea Sales Contract: CESTAT [Read Order]](https://images.taxscan.in/h-upload/2026/03/17/2129501-samsung-required-to-pay-service-tax-for-importing-electronically-downloaded-softwarejpg.webp "Samsung Required to Pay Service Tax for Importing Electronically Downloaded Software Under High Sea Sales Contract: CESTAT [Read Order]")
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Bangalore Bench, held that Samsung is required to pay the service tax for importing electronically downloaded software under high sea sales contract. However, the appeal was allowed partially. Also Read:Service Tax Liability on Threshing and Redrying of Tobacco Leaves not Under Business Auxiliary Services : CESTAT...
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Bangalore Bench, held that Samsung is required to pay the service tax for importing electronically downloaded software under high sea sales contract. However, the appeal was allowed partially.
The appellant, Samsung (India) Software Operations Private Limited, is 100% Export Oriented Unit (EOU) and was allegedly not discharging service tax on Information Technology Software Service (ITSS) from foreign companies. This was later paid voluntarily. The Commissioner confirmed service tax on software imported in Compact Disc (CD) and software purchased from Indian vendors on high seas sale.
The Chartered Accountant for the appellant submitted that since the supplier was not a provider of services based outside India, the appellant would not be liable to pay service tax. Further, prior to 16.05.2008, ‘software’ is not a taxable service and a show-cause notice cannot invoke suppression or mis-representation of facts by the appellant.
The tribunal observed that High Sea Sales mean sales which are carried out when the goods which are being transported by a vessel are on the high seas at the time of sale. CESTAT noted that these are services received from abroad as per Section 66A of the Finance Act 1994 and Taxation of Services Rules, 2006.
The two-member bench accepted the contention that the software imported prior to 16.05.2008 cannot be levied to service tax as the payments were made at a later date. D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) set aside the demand on imported softwares in CDs and electronic software received prior to 16.05.2008 but confirmed service tax on software imported under high sea sales from 16.05.2008 to 31.03.2010. The matter was remanded for redetermination of liability with applicable interest and penalty.
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