2024 (6) TMI 187 - AT - Service Tax

Maintainability of appeal - Refund of service tax paid erroneously - absence of challenge to assessment or self-assessment in appeal - export of services or not - intermediary services or not. Maintainability of appeal - HELD THAT - The Larger Bench in the appellant s own case M/S SHREE BALAJI WAREHOUSE, M/S SATYA WAREHOUSE, M/S OM SHREE SAI RAM, M/S VIAVI SOLUTIONS INDIA PVT. LTD VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, PANCHKULA 2023 (9) TMI 1478 - CESTAT CHANDIGARH (LB) has categorically held that refund of service tax is maintainable even in the absence of any challenge to assessment or self-assessment in an appeal. The Larger Bench has considered the decision of Hon ble Apex Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT and has distinguished the same by holding that the same is not applicable in the facts and circumstances of the present case. Moreover, after the Larger Bench order, this case has been listed before this Division Bench to decide the issue of refund on merits. Therefore, the present appeal is very much maintainable and its maintainability cannot be questioned at this stage. Accordingly, the objections raised by the Department on maintainability are hereby overruled. Whether the services by the appellant to JDSU USA qualified as export of service and hence not exigible to service tax? - HELD THAT - The place of provision of business promotion service shall be the location of the recipient of service which is outside India and such services shall qualify as export of service and hence not subject to service tax and this view has been taken by the Tribunal in various decisions stated/ relied upon by the appellant. Intermediary services or not - HELD THAT - From the perusal of the definition of the Intermediary during the period prior to 01.10.2014, it only pertained to facilitation of provision of service but facilitation of supply of service was inserted only w.e.f. 01.10.2014. Here it is pertinent to note that the period of dispute in the present case is from October 2013 to March 2014 and the definition of Intermediary during that time is applicable wherein the learned Commissioner (Appeals) in the impugned order in Para 7 8 has wrongly observed that the appellant is involved in the business promotion of selling of goods, providing of warranties of goods and hence covered under Rule 4 of POPS Rules, 2012 and further held that service provided by the appellant cannot be treated as export of service. In this regard, it is to be seen that both the authorities have wrongly applied amended definition of Intermediary which was made applicable from 01.10.2014 whereas the period of dispute in this case is from October 2013 to March 2014 and therefore the amended definition of Intermediary service cannot be applied in the present case - the services of business promotion / support and marketing service do not qualify as intermediary service. It is also found that in the impugned order both the authorities below have wrongly observed that the appellant is providing technical services whereas, in fact, the appellant has provided promotional/ marketing services and not provided technical services viz. Repair Service, Erection Commissioning and Installation Service to JDSU USA; the said observation in the impugned order is factually erroneous. The impugned order is not sustainable in law and is set aside - Appeal allowed.

Summary

Issues Involved:
1. Maintainability of refund claim without challenging assessment or self-assessment.
2. Classification of services provided by the appellant as export of service or intermediary service.
3. Applicability of the principle of unjust enrichment.

Summary:

Maintainability of Refund Claim:
The Department raised a preliminary objection based on the Hon'ble Apex Court's decision in ITC Ltd. Vs CCE, Calcutta, arguing that the refund claim is not maintainable without challenging the assessment or self-assessment in appeal. The Tribunal referred the matter to the Larger Bench, which ruled in favor of the appellant, stating that refund claims are maintainable without challenging the self-assessment under the Service Tax Regime. The Department later cited the BT (India) Pvt. Ltd. Vs UOI judgment, but the Tribunal distinguished it, noting that the Larger Bench order specifically addressed the issue of filing an appeal against a self-assessed return, which was not deliberated in the BT India Judgment. Consequently, the Tribunal overruled the Department's objections and held the present appeal maintainable.

Classification of Services:
The appellant contended that the services provided to JDSU USA qualify as export of service under Rule 6A of the Service Tax Rules and Rule 3 of the Place of Provision of Services (POPS) Rules, 2012. The Tribunal examined the services rendered, including promotion/marketing, identification of prospective customers, and liaising between JDSU USA and prospective channel partners/customers. It concluded that the services met the criteria for export of service, as the service recipient was located outside India, payment was received in convertible foreign exchange, and the place of provision of service was outside India.

Intermediary Service:
The Tribunal addressed the definition of "intermediary" under Rule 2(f) of the POPS Rules, noting that the definition applicable before 01.10.2014 pertained only to the facilitation of provision of service, not goods. The period of dispute was from October 2013 to March 2014, thus the amended definition post-01.10.2014 was not applicable. The Tribunal cited various decisions, including Chevron Phillips Chemicals India Pvt Ltd. and Lubrizol Advanced Materials India Pvt. Ltd., to support its conclusion that the appellant was not an intermediary. The appellant provided services on its own account, on a principal-to-principal basis, and not directly to the customers of JDSU USA.

Unjust Enrichment:
The Tribunal noted that the principle of unjust enrichment was not applicable in the context of export of services, as the appellant did not pass on the service tax burden to any other party.

Conclusion:
The Tribunal set aside the impugned order, holding that the services provided by the appellant qualified as export of service and were not intermediary services. The appeal was allowed with consequential relief as per law.