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TMI Blog2025 (1) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... he intermediary, the place of provision of service, the location of service provider i.e. the taxable territory of India. Hence the benefit of export of services could not be extended to the an intermediary located in India. As per the Rule 3 of the Place of Provision of Services Rules in cases such cases the place of provision of service is location of the service recipient, which in the present case is outside India. Appellant are receiving payment against the provisions of these services in convertible foreign exchange. Thus, these services would qualify to get the benefit of export of services as per Rule 6 of the Service Tax Rules, 1994. Thus for this period there cannot be any levy of service tax and the demand made by the impugned order needs to be set aside. Conclusion - The services provided by the appellant in respect of the sale of goods of associated group companies cannot be said to be services provided by intermediary as defined by said Rules ibid. The benefit of export of services would be available to the appellant. Appeal allowed. - MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) AND MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Shri Atul Gupta, Advocate for the Appellant Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r book. During the course of AGUP Audit and Departmental Audit, vide their audit SOF No.37-A-B-2010-11 and IAR (SAP) No.190/2011-12, it was observed that the Appellant acted as a Commission agent for two foreign based companies, in pursuance of which Show Cause Notice C. No. V(15)Adj/Noida/Coperion/103/2011 dated 17.09.2012 was issued demanding service tax under Business Auxiliary Service [BAS] on the commission received by the Appellant for the period from April, 2007 to June, 2012. Against the above mentioned SCN, the ld. Commissioner passed an order dated 11.03.2013 which was subsequently set aside by this Tribunal via Final Order No.71035/2018. In the Final Order, the Tribunal agreed on the legal point that the Appellant was engaged in promoting market for foreign entities in India which amounts to export of service. After the above mentioned SCN, certain further communications took place and eventually the present SCN dated 22.09.2014 was issued to the Appellant for the subsequent period from July, 2012 to March, 2014. The SCN alleged that the Appellant is providing service as an intermediary. The Appellant filed a detailed reply denying the demands proposed in the present SCN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by them. It is apparent from the finding that the commission received was directly related to the sale of goods, thus, the Appellant cannot be an intermediary before the amendment in the definition of intermediary w.e.f. 01.10.2014. 4. Learned Departmental Authorized Representative justified the impugned order and prayed that the appeal, being devoid of any merits, may be dismissed. 5. Heard both the sides and perused the appeal records. 6. We find that the issue is no more res integra and is squarely covered by the Tribunal s Final Order No.71035/2018 dated 28.02.2018 in the Appellant s own case for the previous period i.e. from April, 2007 to June, 2012. The present proceedings are for the period from July, 2012 to March, 2014. The relevant paragraphs of the impugned order are reproduced as under:- 6. At the outset, ld. Advocate for the appellant submitted that the issue is no more res integra in view of the decision of Tribunal in the case of Sumitomo Corporation India Pvt. Ltd. v. Commissioner of S.T., Delhi [2017 (50) S.T.R. 299 (Tri.-Del.)], where the Tribunal has decided in favour of the appellant/assessee. Xxxxxxxxx xxxxxxxxxx 8. After hearing both sides and on perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, we find no merit in the impugned order in so far it confirms the demand against the appellant under BAS. 7. In view of the above discussions, the impugned order cannot be sustained and is accordingly set aside. The appeal filed by the Appellant is allowed. (Order pronounced in open court on .) (P. K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) SANJIV SRIVASTAVA: 8.0 I have gone through the order prepared by Learned Member (Judicial). Having considered the order though I concur with final outcome I would record following reasons.. 9.0 For arriving at the findings recorded by the Learned Member (J) sole reliance has been placed on the decision in the appellant own case which was for the period April, 2007 to June, 2012, when the scheme of taxation of services was significantly different from the scheme of taxation of services during the period in dispute i.e. July, 2012 to March, 2014. By the said decision it was held that demand against the appellant cannot be confirmed under the category of Business Auxiliary Services as defined during the relevant period. 10.0 However, w.e.f. 1st July, 2012 there is no concept like Business Auxiliary, no definition of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign currency. 12.0 From the facts as recorded above, it is evident that appellant is acting as an intermediary as defined by Rule 2 (f) of Place of Provision of Services Rules, 2012 but would fall under the excluded category as the services provided by them are in relation to the goods.. As per the Education Guide issued by Board, following has been clarified in respect of intermediary services:- 5.9.6 What are Intermediary Services ? Generally, an intermediary is a person who arranges or facilitates a supply of goods, or a provision of service, or both, between two persons, without material alteration or further processing. Thus, an intermediary is involved with two supplies at any one time: i) the supply between the principal and the third party; and ii) the supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. For the purpose of this rule, an intermediary in respect of goods (such as a commission agent i.e. a buying or selling agent, or a stockbroker) is excluded by definition. 13.0 Thus appellant is intermediary, however, gets excluded from the said definition for the reasons as his services are in respect of the goods. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur view because para 5.9.6 of The Education Guide issued by the CBEC clearly states :- 5.9.6 What are Intermediary Services ? Generally, an intermediary is a person who arranges or facilitates a supply of goods, or a provision of service, or both, between two persons, without material alteration or further processing. Thus, an intermediary is involved with two supplies at any one time : (i) The supply between the principal and the third party; and (ii) The supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. For the purpose of this rule, an intermediary in respect of goods (such as a commission agent i.e. a buying or selling agent, or a stockbroker) is excluded by definition. Thus while it is true that intermediary includes intermediary in respect of sale of goods, but legislature has while framing these rules deemed it fit to exclude the intermediaries in respect of sale of goods from the definition of intermediary. Hence we cannot sustain the view expressed by the Commissioner, contrary to the express definition of intermediary provided by the Place of Provision of Services Rules, 2012. Hence in our view the services provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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