2024 (9) TMI 841 - AT - Service Tax

Classification of services - Intermediary Service or Export of Services? - providing services to the overseas educational institution from where they were getting certain commission on the basis of agreements with the overseas colleges/universities - HELD THAT - The Adjudicating Authority vacated the demand of service tax on the Appellant by relying upon the decision of the Tribunal in the case of M/s Sunrise Immigration Consultants Private Limited vs. CCE ST, Chandigarh 2024 (9) TMI 409 - CESTAT CHANDIGARH and has held that the services rendered by the Appellant do not fall in the definition of Intermediary Service as defined under Rule 2(f) of the Place of Provision of Service Rules, 2012. Since the issue involved in the present case has already been decided in favour of the Appellant by the Tribunal in the case of M/s Sunrise Immigration Consultants Private Limited vs. CCE ST, Chandigarh holding that the services provided by the Appellant amount to Export of Services and not Intermediary Services . The learned Commissioner (Appeals) was wrong in remanding the matter back to the Adjudicating Authority; accordingly, the impugned order is set aside - appeal allowed.

Issues Involved:
1. Classification of services provided by the appellant as 'Intermediary Services' or 'Export of Services'.
2. Applicability of service tax on the commission received by the appellant.
3. Validity of the remand order by the Commissioner (Appeals) pending the Supreme Court decision in a related case.
4. Applicability of the extended period of limitation for service tax demand.

Issue-wise Detailed Analysis:

1. Classification of Services Provided by the Appellant:
The primary issue revolves around whether the services provided by the appellant qualify as 'Intermediary Services' under Rule 2(f) of the Place of Provision of Service Rules, 2012, or as 'Export of Services'. The Adjudicating Authority initially dropped the service tax demand, ruling that the appellant's services do not fall under 'Intermediary Services'. This decision was based on the Tribunal's ruling in the case of M/s Sunrise Immigration Consultants Private Limited, which held that such services qualify as 'Export of Services' and are not subject to service tax. The Commissioner (Appeals) acknowledged this precedent but remanded the case to await the Supreme Court's decision in M/s Mircosoft Corporation Pvt Ltd.

2. Applicability of Service Tax on Commission Received:
The appellant argued that the commission received from overseas educational institutions should not be subject to service tax as it falls under 'Export of Services'. The Adjudicating Authority agreed, referencing the Tribunal's previous decisions, including M/s Sunrise Immigration Consultants Private Limited and M/s Study Overseas Global (P) Ltd, which determined that such services are not 'Intermediary Services' but 'Export of Services'. This classification exempts them from service tax.

3. Validity of the Remand Order by the Commissioner (Appeals):
The Commissioner (Appeals) remanded the case to the Adjudicating Authority, pending the Supreme Court's decision in M/s Mircosoft Corporation Pvt Ltd. The appellant contested this remand, arguing that the Commissioner (Appeals) should have dismissed the department's appeal based on existing Tribunal decisions favoring the appellant. The Tribunal agreed with the appellant, stating that the Commissioner (Appeals) was bound by the higher appellate authority's decisions and should not have remanded the case.

4. Applicability of the Extended Period of Limitation:
The Tribunal noted that the issue pertains to the interpretation of the Place of Provision of Service Rules, 2012. Given this context, the extended period of limitation for service tax demand is not applicable. This conclusion aligns with the Tribunal's findings in the case of M/s Sunrise Immigration Consultants Private Limited, which ruled that the extended period could not be invoked for such cases.

Conclusion:
The Tribunal concluded that the services provided by the appellant qualify as 'Export of Services' and are not 'Intermediary Services', thus exempting them from service tax. The remand order by the Commissioner (Appeals) was deemed unjustified, and the Tribunal set aside the impugned order, allowing the appellant's appeal with consequential relief as per law. The Tribunal emphasized that lower authorities are bound by the decisions of higher appellate authorities, referencing several judicial precedents to support this principle.

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