2019 (5) TMI 1813 - AT - Service Tax

Refund of accumulated CENVAT credit in cash - Ld. Commissioner (Appeals) came to the conclusion that since the respondent fit into the definition of intermediary therefore the services provided by the appellant do not fall within the scope export service - period April 2015 to March 2016 - HELD THAT - The facts are not in dispute are that the appellant are engaged in providing man power recruitment/supply agency services to their overseas client Seaspan Canada under an agreement with them. There is no stipulation either under Article 2 or under any of the clauses of the agreement whereby it could be inferred that the Printed by Bolt PDF (c) NCH Software. Free for non-commercial use only. the finding of the Ld. Commissioner (Appeals) at para 6 of the impugned order that they were supplying man power on behalf of their overseas client is factually incorrect and not supported by any evidence. This is the only reasoning advanced by the Ld. Commissioner (Appeals) in setting aside the refund order where under the original authority after verification of all other conditions prescribed under the said notification 27/2012 CE(NT) dated 19/06/2012 issue d under Rule 5 of the Cenvat Cred it Rules 2004 sanctioned the refund - The allegation of the department as observed above that the appellant is a n intermediary is without any basis hence cannot be sustained. Appeal allowed - decided in favor of appellant.

Issues:
1. Refund claim of accumulated CENVAT credit for the period April 2015 to March 2016.
2. Interpretation of services provided by the appellant as 'export service'.
3. Application of Place of Provision of Service Rules, 2012.
4. Determination of whether the appellant qualifies as an 'intermediary'.
5. Dispute over the eligibility of the appellant for cash refund of accumulated credit.

Analysis:
1. The appellant filed quarterly refund claims of accumulated CENVAT credit for a specific period. The original authority allowed the refund claim, but the Revenue filed an appeal against it. The Ld. Commissioner (Appeals) allowed the Revenue's appeal, leading to further appeals and subsequent rejection of the refund claim by the adjudicating authority.

2. The appellant, engaged in providing man power supply services, argued that they do not act as intermediaries and the services provided fall within the scope of 'export service'. The Ld. Commissioner (Appeals) categorized the appellant as intermediaries, concluding that the services did not qualify as 'export service'. The appellant contended that they complied with the Place of Provision of Service Rules, 2012, as the recipient of service was outside India, making it an 'export service'.

3. The definition of 'intermediary' under the Place of Provision of Service Rules, 2012 was crucial in determining the appellant's eligibility for the refund claim. The appellant argued that they did not act as brokers or agents, thus Rule 9(c) of the Rules was not applicable in their case.

4. The Revenue reiterated the findings of the Ld. Commissioner (Appeals), supporting the rejection of the refund claim based on the classification of the appellant as intermediaries. However, the Tribunal found no evidence or basis to support this classification, emphasizing that the appellant did not supply manpower on behalf of their overseas client. The Tribunal concluded that the appellant did not qualify as intermediaries and set aside the impugned orders, allowing the appeals with consequential relief.

5. The Tribunal's decision was based on the lack of evidence supporting the classification of the appellant as intermediaries, ultimately leading to the rejection of the refund claim. The Tribunal emphasized that the appellant's services did not fall under the definition of 'intermediary', thereby allowing the appeals and providing relief to the appellant as per law.

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