Samsung (India) Software Operations Private Limited Vs Commissioner of Central Excise (CESTAT Bangalore)
The appeal was filed against an order confirming service tax liability on software transactions, including software imported through compact discs and high sea sales. The appellant, a 100% Export Oriented Unit engaged in software research and development, had received Information Technology Software Services (ITSS) from foreign entities and later paid service tax voluntarily. The dispute primarily involved three issues: liability on software imported via compact discs, liability on software procured through high sea sales, and applicability of tax for services received prior to 16.05.2008.
The Tribunal first addressed the levy of service tax on software imported through compact discs. It noted that compact discs are considered “goods” as per the Supreme Court’s ruling and, therefore, not subject to service tax. Accordingly, the demand on this count was set aside.
On the issue of software obtained through high sea sales, the Tribunal observed that the software originated from foreign entities and was ultimately imported by the appellant, as evidenced by filing of Bills of Entry and payment of customs duties. It held that such transactions qualify as import of services under Section 66A of the Finance Act, 1994, and are liable to service tax. The Tribunal rejected the argument that high sea sales negate tax liability.
