2013-TIOL-1541-CESTAT-MUM Commissioner of C. Ex., Pune vs. Aztecsoft Ltd.

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Testing and analysis of IT Software – specific amendment in the definition of “Technical Testing and Analysis” to bring within its fold testing and analysis of IT software with effect from 16-05- 2008. Activity not taxable prior to the said date under any category.

Facts:
The Department appealed against the order of the Hon. Commissioner dropping the demands of the assessee for the period prior to 16-05-2008 for providing services of testing and analysis of computer software. Since the definition of “Technical Testing and Analysis” service was specifically amended on 16-05-2008 to include the said activity, it was taxable only with effect from 16-05-2008 according to the assessee. The decision of Stag Software Pvt. Ltd. in 2008 (10) STR 329 (Tri-Bang) and Relq Software Pvt. Ltd. in 2011 (23) STR 449 (Kar) were relied upon.

Held:
Referring to the definition of “Technical Testing and Analysis” prior to 16-05-2008 and as amended with effect from 16-05-2008, the budget instructions letter 334/1/2008 – TRU dated 29-02-2008 was referred to and relying on the decision of Relq Software (supra) held that testing and analysis of IT software would be effective only from 16-05-2008 when the said activity was specifically included under technical testing and analysis service as IT software services were introduced on the said date. Similar amendments were made in the taxable services of Business Auxiliary Services, technical inspection & certification, management repair of properties and consulting engineer’s services to include IT software services.