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2017 (12) TMI 772 - AT - Service Tax100% EOU - Refund of unutilized CENVAT credit - denial on the ground that the services are intermediary services - Held that - the appellant is a subsidiary of its holding company and is providing services under the Master Services Agreement and the same Master Services Agreement does not provide that the appellant will facilitate or will arrange the purchase and sale on behalf of the AMD entities outside India - the services rendered by the appellant do not fall under the definition of intermediary and it satisfies all the conditions prescribed under rule 6A of the Service Tax Rules, 1994 because the services recipient is located outside India and the place of provision of service is outside India and the consideration has also been received in convertible foreign for exchange. The services rendered by the assessee is in the nature of export of service and does not fall in the definition of intermediary service. Appeal allowed - decided in favor of appellant.
Issues:
- Appeal against common impugned order passed by Commissioner(Appeals) - Refund claim disallowed in part by Assistant Commissioner - Dispute over refund related to ITSS and BAS services - Applicability of Rule 5 of CENVAT Credit Rules, 2004 - Export of ITSS and BAS without payment of service tax - Interpretation of intermediary service under Rule 2(f) of Place of Provision of Services Rules, 2012 - Conditions for export of service under Rule 6A of Service Tax Rules, 1994 - Comparison with similar judgments for clarification on export of service Analysis: The case involves three appeals filed against a common impugned order by the Commissioner(Appeals) regarding a refund claim disallowed in part by the Assistant Commissioner. The dispute revolves around the refund related to Information Technology Software Services (ITSS) and Business Auxiliary Service (BAS) provided by the appellant. The appellant, an export-oriented unit, filed a claim for refund of unutilized CENVAT credit amounting to a significant sum for a specific period. The Assistant Commissioner disallowed the refund, leading to an appeal by the appellant. The Commissioner(Appeals) partially allowed the refund related to ITSS but denied it for BAS, prompting the appellant to file further appeal. The main contention raised by the appellant is that the impugned order failed to appreciate the factual position and relevant laws. The appellant argued that the services provided, including marketing support services categorized under BAS, did not qualify as intermediary services under Rule 2(f) of Place of Provision of Services Rules, 2012. The appellant highlighted fulfilling all conditions for export of ITSS and BAS under Rule 6A of Service Tax Rules, 1994, including service recipient location, place of provision, and consideration in foreign exchange. The appellant presented technical details, agreements, and Foreign Inward Remittance Certificates (FIRCs) to support their claim of exporting services to recipients abroad. In contrast, the Department reiterated the findings of the impugned order. However, after considering submissions from both parties and examining relevant material and case laws, the Judicial Member found in favor of the appellant. The Member concluded that the appellant's services did not fall under the definition of intermediary and met all conditions for export of services under Rule 6A. Citing previous judgments and clarifications, the Member emphasized that the benefit of services accruing outside India sufficed for export, even if activities occurred in India. By aligning with precedent decisions and clarifications, the Member set aside the impugned order, allowing the appeals of the appellant. In summary, the judgment addressed the issues of refund claim disallowance, export of ITSS and BAS services, intermediary service classification, and compliance with service tax rules. The detailed analysis considered factual submissions, legal interpretations, and comparisons with relevant judgments to arrive at a decision favoring the appellant's position.
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