Order Date – 07 July 2023

Parties: Avaya Global Connect Vs Commissioner of Central Excise & ST, Ahmedabad

Facts –

• The Appellant, Avaya Global Connect, have collected activation charges in respect of telecom equipment EPABX system which was sold earlier. 
• It was alleged that since activation of software activity was carried out after the sale of equipment, the same is liable for service tax under Business Auxiliary Service.

Issue –

• Whether activation charges for activating software is liable to service tax when the sales tax on the same activity was discharged?

Order –

• The Tribunal observed that the in identical issue, only for the different period, has been decided vide order No. A/10004/2023 dated 04.01.2023 it was held that “it is clear that the amount collected by the Appellant from their customers against as “activation charges” of equipment/ software features are covered under the activity of sales of goods and not covered under the provisions of “Service” as defined in the Act. Therefore, we don’t find any merits in impugned order.”
• Further it was held in that case that “the appellant admittedly paid the Sales Tax/ VAT duty on the entire transaction and also issued invoice/bills to customer for the above disputed transactions. Accordingly, no suppression or mis-declaration can be attributed to the appellant for invoking extended period of demand. Accordingly, the demand for longer period is not sustainable on the ground of limitation also.”
• From the above, it can be seen that the facts and legal issue are identical to the present case therefore, the ratio of the above decision in the appellant’s own case is squarely applicable. Accordingly, following the above decision of this Tribunal, the appeal is allowed.

Case laws on gst