9911796707
TMI Blog2022 (2) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in taxable territory and not in dispute here. The appellant does render service in taxable territory and that due tax is discharged on such transactions is common ground. The lower authorities have not identified the terminal entities that the appellant is purportedly intermediary for, the manner in which the intermediary service is recompensed in the channelizing of consideration from the customer to the supplier or the origin of the supply of service in the course of which the intermediary facilitation by the appellant occurs. The adjunct proposition of no service to obfuscate this lacuna brings the contradiction to the fore the determination of intermediary is founded upon the obligations in a contract which should not only have been redundant but also not acknowledgeable as contract if the proposition that the compensation terms therein, not being consideration in the absence of service , are an internal arrangement for reimbursement of expenses is also accepted. Logic and legality are obviously invisible in the conclusions of the lower authorities. The nature of the service is irrelevant for the purpose of rule 5. All that is required is complia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with M/s Rolex SA being nothing more than internal transfer of funds, it was held by the lower authorities that, even if these were exports within the meaning of rule 6A of Service Tax Rules, 1994, the entitlement would have to be restricted to ₹ 10,77,183/- owing to documentary deficiencies. Consequently, the dispute may be compartmentalised as: eligibility for coverage under rule 5 of CENVAT Credit Rules, 2004 and appropriateness of disallowing of credit beyond ₹ 10,77,183/- for refund. 2. Learned Counsel for appellant was at pains to discredit the observation in the impugned order that they had been derelict in furnishing relevant information that may have forestalled the truncating of eligible credit; relying upon the correspondence with the service tax authorities, he pointed out to the prompt response of theirs to the piece-meal exercise undertaken in processing their claims. 3. According to Learned Counsel, the irrationality of the finding that the impugned activity did not qualify as exports was evident from the absence of any proceedings for recovery of tax on service rendered domestically which is implicit in such determination of non-export on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses incurred at the local end and not consideration for service to warrant recovery of tax under Finance Act, 1994, a separate finding by the lower authorities of the impugned activity being covered by intermediary services in Place of Provision of Services Rules, 2012, by which, contrary to the default benchmark of location of recipient , it is the location of provider that determines taxable territory , is at odds with the conclusion of no service having been provided or received. The test of service is not financial flows or consideration which is bereft of any standing except in the context of the entirety of section 65B(44) of Finance Act, 1994. There has been no foray in that direction by the lower authorities and, without determination of exclusion from service in the manner intended therein, the proposition of absence of service to alienate financial flows from consideration is not tenable. 4. Learned Counsel contends that the very same activity was, for the period prior to 1st July 2012, accepted as covered within the scope of Export of Services Rules, 2005 for eligibility under rule 5 of CENVAT Credit Rules, 2004 and it would appear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any post-warranty repair/ replacement, which dealers are unable to handle, the undertaking of such work by the appellant entitles them to bill the customer which is taxable service rendered in taxable territory and not in dispute here. The appellant does render service in taxable territory and that due tax is discharged on such transactions is common ground. 9. The appellant claims that the consideration pursuant to contractual obligation with M/s Rolex SA for rendering services outside the taxable territory should be relieved of the tax component in accordance with rule 5 of CENVAT Credit Rules, 2004. It is ironical that a tax administration, otherwise keen to perceive service in any contractual obligation involving financial flows, contends no service, no consideration in the present dispute to deflect eligibility for refund; a clear instance of, and because it is a revenue administration that does not bind itself to consistent approach, running with the hounds and hunting with hares that does not appeal either logically or legally. The lower authorities have not identified the terminal entities that the appellant is purportedly intermediary for, the manner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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