Sanjay Karol JUDGMENT
Abhay Shreeniwas Oka, J.
FACTUAL ASPECTS
1. These two appeals arise out of service tax demands on the basis of four Show Cause Notices. The notices were issued Under Section 73 of the Finance Act, 1994 (for short "the Finance Act") for the demand of service tax. The brief particulars of Show Cause Notices are as under:
2. The adjudication in respect of Show Cause Notices was made by the Commissioner which was challenged before the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai (CESTAT). An order of remand was passed by CESTAT. In the order of remand, CESTAT observed that it is not borne out from the impugned order of the Commissioner how service tax liability has been computed. CESTAT further observed that if the Assessee has purchased software from third parties and sold the same on payment of VAT and supplied hardware on payment of VAT, the same would not be liable to service tax. It was further held that the liability to service tax would arise only in respect of the software which the Assessee has developed as per customers' specifications and supplied to their customers. The Tribunal further observed that it was necessary to go through the agreements entered into by the Assessee with his clients, bills raised for services rendered, the goods supplied and the payments made towards the service tax liability.
3. On the basis of the order of remand, the Commissioner of Service Tax, Mumbai-II made adjudication on the four Show Cause Notices. The Commissioner held that the services rendered by the Assessee from 10th April 2004 up to 15th May 2008 in relation to software need to be classified under the category of "Intellectual Property Service" defined Under Section 65(55b) of the Finance Act. It was further held that from 16th May 2008 onwards, in relation to the software, the classification of service rendered should be under the category of "Information Technology Software" defined Under Section 65(53a) of the Finance Act. Thirdly, it was held that the value of the computer hardware items consumed for providing the services is required to be included in the valuation of the respective services in terms of Section 67 of the Finance Act. Consequential orders regarding payment of interest and penalty were passed by the Commissioner.
4. Being aggrieved by the said Order-in-Original, the Assessee preferred an appeal before the CESTAT. By the impugned judgment dated 18th September 2018, CESTAT held that the services subject matter of dispute were classifiable under the category of "Information Technology Software" with effect from 16th May 2008 and for the earlier period up to 15th May 200........