INTELLICON PVT. LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THIS Stay Petition is filed for waiver of pre -deposit of Service Tax of Rs. 4,00,238/ -, interest thereof and penalties under Sections 77 & 78 of Finance Act, 1994. The above said amounts have been confirmed as Service Tax liability with interest and penalties have been imposed on the ground that the appellant has not discharged the Service Tax liability under the category of Information Technology Software services.

(2.) LD . counsel would submit that the appellant in this case, has manufactured customized software and has discharged the Central Excise duty as applicable under Chapter Heading 8523. He would draw our attention to Chapter Note No. 10 of Chapter 85 and supplementary note to the said Chapter and submit that as they understood, they discharged the Excise duty on the same. It is his submission that now the Department is saying that this software which is generated in the appellant's premises, is liable to Service Tax under the category of Information Technology Software service, as they are falling under the category of service provider.

(3.) ON careful consideration of the submissions made by both sides, we find that it is not in dispute that the appellant has discharged the Central Excise duty on such software manufactured/prepared by them on payment of appropriate Central Excise duty. As correctly pointed out by the ld. counsel, we find that under Chapter 8523 80 20, "Information Technology Software" is indicated as a commodity falling under Central Excise Tariff and by the deemed fiction of the Chapter Note and the Supplementary Note, the product becomes manufactured item. If that be so, discharge of Central Excise duty by the appellant itself would indicate that the appellant has correctly followed the law. Department's contention that the appellant is liable to pay Service Tax, prima facie, seems to be misconception of the said definition. We find that the appellant has made out a case for waiver of pre -deposit of the amounts involved. Accordingly, the application for waiver of pre -deposit of the amounts involved is allowed and recovery thereof is stayed till the disposal of appeal.