2022 (10) TMI 693 - AT - Service Tax

Refund of un-utilisedCenvat Credit on input service used in providing taxable service - Business Auxillary Service - Intermediary Services or not - HELD THAT - The Tribunal in COMMISSIONER OF GOODS SERVICE TAX GURGAON-II VERSUS ORANGE BUSINESS SOLUTIONS PVT. LTD. 2019 (5) TMI 1351 - CESTAT CHANDIGARH dismissed the same after going into detailed facts of the matter including the agreement between the Orange Business Services and its customer and also taking into consideration the Guidance Notes of CBE C dated 20/06/2012 clarifying the meaning of Intermediary . As the cited decision has not been stayed or set aside in any appeal, as we can gather from the case records, therefore there is no reason for us to take a contrary view. Since the issue involved herein is no more res integra in view of the decision, therefore following the same we do not find any merit in the appeal filed by the Revenue and the same is accordingly dismissed.

Summary

Issues:
1. Whether the services provided by the respondent-assessee fall within the category of "Intermediary Services."

Analysis:
1. The appeal was filed by the Revenue challenging the order passed by the Commissioner, CGST (Appeals) Gurugram, where the appeal by the appellant was allowed, setting aside the Order-in-ST/ Original No. 50/Refund/CGST/Div-East-1/2017-18 by the Adjudicating Authority. The respondent-assessee sought a refund of unutilized Cenvat Credit on input services used in providing taxable services of "Business Auxiliary Service" exported to clients outside India. The Adjudicating Authority rejected the refund claim, stating the respondent did not fulfill the export condition. However, the Commissioner, following a previous decision in the respondent's case, allowed the appeal.

2. The Tribunal analyzed the issue of whether the respondent provided intermediary services. Referring to a previous decision in "Commissioner of GST, Gurugram-II v/s Orange Business Solution Private Limited," the Tribunal dismissed the Revenue's appeal. The Tribunal cited a Guidance Note by CBEC clarifying the meaning of intermediary services. It highlighted that an intermediary arranges or facilitates a provision of a "main service" between parties without altering the nature or value of the service. The Tribunal concluded that the respondent was not acting as an intermediary based on the nature of their services and the lack of evidence presented by the Revenue.

3. The Tribunal further explained that the respondent's activities were routine back-office process outsourcing based on instructions from another entity, and there was no evidence to treat them as an intermediary. The Tribunal upheld the Commissioner's decision to grant the refund claim, stating that the respondent was not providing intermediary services and therefore not liable for service tax. The Tribunal found no infirmity in the impugned order and dismissed the appeal filed by the Revenue, upholding the respondent's entitlement to the refund as per the impugned order.

4. The Tribunal noted that the issue had been previously decided in the respondent's favor for an earlier period, and as that decision had not been stayed or set aside, there was no reason to take a contrary view. Therefore, based on the precedent set by the previous decision, the Tribunal found no merit in the Revenue's appeal and dismissed it accordingly. The respondent was entitled to consequential relief as per the impugned order.

In conclusion, the Tribunal's detailed analysis based on the interpretation of intermediary services and the specific nature of the respondent's activities led to the dismissal of the Revenue's appeal and the affirmation of the Commissioner's decision to grant the refund claim to the respondent. The Tribunal's reliance on legal principles and previous decisions provided a comprehensive understanding of the issue at hand.