Tata Consultancy Services Limited Vs C.S.T. (CESTAT Delhi)
The first demand has been raised under the category of Franchisee The appellant has developed a course relating to Diploma in Advance Software Technology. Such course has been run through affiliated centers and out of the fee charged from the students, 25 per cent of the fees has been retained by the appellant. Revenue‘s case is that Service Tax is liable to be paid on the said amount retained, under the category of Franchise Services.
The issue has been decided against the assessee in appellant‘s own case CMC Ltd. V/s Commissioner Hyderabad (supra). In the said case, the Tribunal has upheld the demand under the Franchisee Service but set aside the penalty by taking recourse to Section 80 of the Act.
Management Consultancy Service not only include rendering of advice, technical assistance and consultancy but also includes actual management or executor functions
The second part the demand of Service Tax has been raised under the category of Management Consultancy Service. The appellant has entered into an agreement with the Department of Science and Technology (DST). Various activities were required to be carried out by the appellant under this agreement, towards Facility Management Services. The activity included those related to the operations of the computer systems; providing management services; providing technical service; management of computer facility and also providing systems software personnel for installment of software, managing user account, setting up and maintaining the network development of utilities etc. Revenue is of the view that the activities are covered within the definition of Management Consultancy Services. But the appellant has argued that they were responsible for entire operation of the facilities/ system installed in DST through its own personnel. It is their submission that the definition of Management Consultancy Service does not include the actual management or executor functions but only covers rendering of advice, technical assistance and consultancy.
When we carefully consider the definition of Management Consultant as it existed during the different periods, it is evident that the appellant has not carried out management of any complete organization such as the DST. But what has been done is technical assistance in the operation of the computer systems of DST and management of the Centre. Such activities, definitely are liable to be covered within the terms “Technical Assistance in relation to any working system of any organization“, In the definition prevalent during w.e.f. 01/05/2006 to 01/06/2007, the activities performed by the appellant would be even more specifically covered under “Technical Assistance in relation to management of information technology resources“. In view of above we have no hesitation in holding that the activity performed by the appellant for DST would be covered within the definition of management consultancy services during the period of dispute.
FULL TEXT OF THE ITAT JUDGMENT
These two appeals filed by the same appellant have overlapping issues for different periods and hence are being disposed off through this common order. The details of the appeals being disposed off are deputed below;
