2017 (10) TMI 806 - AT - Service Tax

Refund of unutilized CENVAT credit - Export of services - Rule 5 read with N/N. 27/2012 - POPOS Rules - Rule 8 of Place of Provision Rules, 2012 - case of Revenue is that Appellant is rendering marketing / technical support services falling under BAS to their parent company in Singapore wherein the actual service recipients are those availing services from the appellant, viz. the Indian client companies of the foreign parent company and therefore in terms of Rule 8 of Place of Provision Rules, 2012, services are provided in India - Held that - as per the agreement also appellant is engaged in providing project support services, consulting services, marketing on product, technical support services etc. to the foreign company. The learned Commissioner has also come to the conclusion on the basis of the relevant documents available on record that such services are rendered to the group company located outside India and the payment of such services is received by the appellant in convertible foreign exchange - refund allowed. Intermediary services - W.e.f. 01/07/2012, in case of intermediary service defined under Rule 9 of Place of Provision Rules, 2012, the services are rendered in India - Held that - the findings of both the authorities that the services rendered by the appellant fall under the definition of intermediary under Rule 2(f) of the Place of Provisions of Service Rules, 2012 and in terms of Rule 9 of the Place of Provision of Service Rules, 2012 specified vide Notification No.28/2012 dt. 20/06/2012 which is effective from 01/07/2012 in the case of intermediary service, place of provision of services shall be the location of the service provider and therefore the services rendered by the appellant cannot be treated as export of services in terms of Rule 3 of the Export of Service Rules, 2012. More so, condition No.(d) laid down in Rule 6(9) of the Service Tax Rules are not satisified - there is no infirmity in the impugned order. Appeal allowed in part.

Summary

Issues:
- Appeal against common impugned order upholding Orders-in-Original for refund claims.
- Dispute over export of services for unutilized CENVAT credit.
- Interpretation of service agreements and Place of Provision Rules.
- Appellant's claim of not being an intermediary.
- Analysis of agreement clauses and nature of services provided.
- Application of Place of Provision of Services Rules, 2012 for determining export of services.

Analysis:
The appellant filed six appeals against a common impugned order upholding Orders-in-Original for refund claims. The appellant sought refund of unutilized CENVAT credit on input services used for exported output services under Rule 5 of the CENVAT Credit Rules 2004. The issue revolved around whether the services provided by the appellant constituted export of services. The authorities rejected the refund claims citing various grounds, including the applicability of Place of Provision Rules and the nature of services provided.

The appellant contended that the services were rendered to a foreign company in Singapore independently, not as an intermediary facilitating services to Indian clients. The appellant argued that the recipient of the service was the foreign entity, justifying the export of services. However, the authorities maintained that the services fell under the definition of an intermediary, as per the Place of Provision of Services Rules, 2012, and hence did not qualify as export of services.

The agreement between the appellant and the foreign company in Singapore outlined services such as marketing support and technical assistance provided by the appellant. The authorities analyzed the agreement clauses and concluded that the services rendered by the appellant aligned with the definition of an intermediary. They emphasized that the location of the service provider determined the place of provision of services, as per Rule 9 of the Place of Provision of Services Rules, 2012, thereby negating the export status of the services.

Ultimately, after considering submissions and agreement details, the tribunal upheld the impugned order, dismissing the appeals of the appellant. The tribunal found no merit in the appellant's argument against being classified as an intermediary, as the nature of services provided and the agreement clauses supported the authorities' decision regarding the non-export status of the services.

This comprehensive analysis highlights the key legal issues, arguments presented by both parties, and the tribunal's decision based on the interpretation of relevant rules and agreements.