Custom, Excise & Service Tax Tribunal Oracle India Pvt Ltd vs Bangalore Service Tax I on 8 August, 2024 C/20766, 21007/2016 CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE REGIONAL BENCH COURT NO. 1 Service Tax Appeal No. 3061 of 2011 (Arising out of OrderinOriginal No. 146/2011 dated 30.08.2011 passed by the Commissioner of Service Tax, Bangalore.) M/s. Oracle India Pvt. Ltd. Oracle Technology Park, Appellant(s) 3, Bannerghatta Road, Bangalore 560 029. VERSUS The Commissioner of Service TaxI No.16/1, 5th Floor, S.P. Complex, Respondent(s) Lalbagh Road, Bengaluru 560 066. WITH Service Tax Appeal No. 717 of 2012 (Arising out of OrderinAppeal No. 517/2011 dated 10.12.2011 passed by the Commissioner of Central Excise (AppealsII), Bangalore.) M/s. Oracle India Pvt. Ltd. Appellant(s) Oracle Technology Park, 3, Bannerghatta Road, Bangalore 560 029. VERSUS The Commissioner of Service TaxI No.16/1, 5th Floor, S.P. Complex, Respondent(s) Lalbagh Road, Bengaluru 560 066. APPEARANCE: Shri Bharat Raichandani, Advocate for the Appellant Shri Dyamappa Airani, Dy. Commissioner (AR) for the Respondent HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) Page 1 of 20 C/20766, 21007/2016 FINAL ORDER NO. 20613 20614 /2024 DATE OF HEARING: 09.02.2024 DATE OF DECISION: 08.08.2024 PER: R. BHAGYA DEVI Appeal No.ST/3061/2011 is filed against impugned Order inOriginal No.146/2011 dated 30.08.2011 and Appeal No.ST/717/2012 is filed against OrderinAppeal No.517/2011 dated 10.12.2011 by the appellant M/s. Oracle India Pvt. Ltd. (OIPL). 2. The appellant, M/s. Oracle India Pvt. Ltd. (OIPL) is a wholly owned subsidiary of M/s. Oracle Systems Corporation, USA. They are engaged in distribution, promotion, marketing, licensing and sublicensing of the software products developed by OIPL, USA. During investigations, the Department noticed that the appellant is engaged in distribution and sale of three types of products /services to its clients namely: i. Software product licenses. ii. Software product updates iii. Software product supports. 2.1 The software updates sold and distributed by the appellant were valid for a prospective period of one year. These software updates are improved releases of the software program licenses updated and improved versions of base software programs which M/s. Oracle Systems Corporation, USA keeps developing on an ongoing basis through research and development. On all the software updates sold on or after 16.05.2008, Service Tax was paid since the Information Technology Software Service (ITSS) under Section 65(105)(zzzze) came into effect from 16.05.2008. Page 2 of 20 C/20766, 21007/2016 For the software updates sold under the invoices issued prior to 16.05.2008 where services were continued to be provided even after 16.05.2008, that part of value of services which were provided or to be provided on or after 16.05.2008 are liable for payment of Service Tax on prorata basis is the contention of the Department. Accordingly, based on the definition of ITSS, the appellant was liable to pay duty for the software updates which were used in the course of business. Showcause notice dated 26.08.2010 was issued for the period 200809 and 20092010, demanding duty of Rs.15,50,51,472/ which was confirmed vide the impugned OrderinOriginal No.146/2011 dated 30.08.2011. The Commissioner invoking suppression on the part of the appellant, confirmed duty amount of Rs.13,81,18,580/ along with the interest in terms of proviso to Section 73(1) read with Section 73(2) of the Finance Act, 1994 by allowing the cumtax benefit. He imposed equivalent amount of penalty under Section 78 of the Finance Act,1994. Aggrieved by the above order, Appeal No.ST/3061/2011 is filed, and Appeal No.ST/717/2012 is against the rejection of refund on the amount paid in the above impugned OrderinOriginal No. 146/2011 dated 30.08.2011. Since both appeals are interlinked, the same are taken simultaneously for hearing and disposal. Appeal No.ST/3061/2011 3. The learned counsel on behalf of the app