2023 (1) TMI 1386 - AT - Service Tax

Cash refund claims of accumulated cenvat credit - intermediary services - export of service - Rule 5 of the CENVAT Credit Rules 2004 read with N/N. 27/2012-CE(NT) dt. 18/06/2012 - HELD THAT - It is not in dispute that the appellant through Marketing and Sales Support Agreement dt. 12/06/2006 and 06/05/2011 with MSP and MSA inter alia agreed to provide the various services like Promote products Technical Services Marketing and Technical Staff Market analysis Cooperation Products problems and changes and Customer updates. Similar terms of agreement have been examined by this Tribunal in Blackberry India Pvt. Ltd. s case 2022 (12) TMI 660 - CESTAT NEW DELHI and the Tribunal observed The terms of the Agreement also per se do not create any relationship of principal and agent or employer and employee. An agent is a person employed to do any act for another or to represent another in dealing with third persons. The persons for whom such act is done or who is so represented is the principal. A broker is a middleman or an agent who for a commission on the value of the transaction negotiates for others the purchase or sale of stocks bonds commodities or a property. These two situations do not arise in the present case. There are no reason to not adopt the aforesaid reasoning of the Tribunal in understanding the meaning and scope of intermediary service in the light of the same terms and conditions of the technical service agreement. The services rendered by appellant cannot fall under the definition of Intermediary Service . In the result the impugned order is set aside - Appeal allowed.

Summary

Issues:
- Appeal against rejection of refund claims for accumulated cenvat credit on input services.
- Determination of whether services provided by the appellant fall under the category of 'intermediary services' affecting eligibility for refund.
- Interpretation of agreements and services provided under them to ascertain the nature of services rendered.
- Application of previous tribunal judgments to determine the classification of services.
- Decision on whether the appellant's services meet the criteria for 'intermediary services' as per relevant laws and agreements.

Analysis:
1. The appeal was filed against the rejection of refund claims for accumulated cenvat credit on input services during specific periods. The adjudicating authority held that the services provided by the appellant were categorized as 'intermediary services,' making them ineligible for the refund.

2. The appellant contended that the services rendered under agreements with two entities were technical in nature and aimed at marketing and sales support. They argued that these services did not qualify as 'intermediary services' based on previous tribunal judgments and the definition outlined in relevant circulars under the GST regime.

3. The Revenue, however, supported the findings of the Commissioner(Appeals), stating that the services provided by the appellant facilitated sales and market analysis for their principals, thus falling under 'intermediary services.'

4. The Tribunal examined the agreements between the parties and the nature of services provided. It was noted that the appellant's services included promoting products, providing technical services, maintaining marketing and technical staff, market analysis, cooperation in promotional activities, and customer updates.

5. Referring to a previous tribunal judgment in a similar case, the Tribunal highlighted that the appellant was not acting as an agent or broker, did not facilitate supplies between the principals and customers, received consideration on a Cost-Plus basis, and invoiced the principal for services provided.

6. Based on the analysis of the agreements and services provided, the Tribunal concluded that the appellant's services did not qualify as 'intermediary services.' Following the precedent set in the previous judgment, the impugned order was set aside, and the appeals were allowed with consequential relief, if any, in accordance with the law.