Service Tax
TRT-2025-
Cestat Chennai
Date:-24-03-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 24 March 2023
Parties: M/s. Dassault Systemes Simulia Private Limited Vs The Commissioner of Central Excise and Service Tax
Facts –
- The Appellant, M/s. Dassault Systemes Simulia Private Limited, are the dealers in computer software and also an authorized dealer for M/s. Abaqus Inc., U.S.A. (now known as ‘DS Simulia Corp’) and that they are the sole distributor and supplier of the Abaqus software in India.
- They purchase the said software from the foreign company in U.S.A and entered into various types of agreements with purchasers in India, which entitle such purchasers to the Abaqus software and depending on the nature of the agreement, such purchaser would also become entitled to periodical upgrades, maintenance, enhancement and support.
- A show cause notice was issued to the appellant alleging that the appellant being the recipient in India was liable to pay Service Tax under reverse charge mechanism in terms of Section 66A of the Finance Act, 1994 read with Rule 2(i)(d)(iv) of the Service Tax Rules, 1994 with effect from 10.07.2004
Issue –
- Whether the Revenue was justified in demanding Service Tax from the appellant under the category of ‘management, maintenance or repair’ service?
Order –
- The Tribunal observed that Section 66A and Rule 3 would apply only when the location of the service provider is outside India and the recipient is located in India. There is no dispute here that the software is treated as ‘goods’ and the alleged service albeit provided through internet, but performed in India.
- Therefore, to say that the software was available in India, with the appellant and hence the provision of service was from India only, as observed by the Adjudicating Authority, runs counter to the demand of Service Tax under reverse charge mechanism within the meaning of Section 66A ibid. read with Rule 3 (ii) of the Taxation of Services Rules ibid.
- Hence, it was held that the appellant could not have been fastened with the Service Tax liability under management, maintenance or repair service for the reason that there is no document placed on record to negate the appellant’s claim that they have not rendered any service in India and the Revenue has also not been able to place anything on record in their support to establish that the appellant had rendered nothing but management, maintenance or repair service.
- The appeal is allowed.
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