2019 (2) TMI 579 – CESTAT MUMBAI – TMI – Refund of service tax – intermediary services or not – Service Tax paid on various input services used in providing taxable output service – Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE(NT) dated 18.6.2012 – export of service or not within Rule 6A of the Service Tax Rules, 1994 – Held that:- As per the Internal Services Level Agreement between the appellant and their client, precisely, the service provider is required to render services, namely, development of various softwares and maintenance of such software supplied to the foreign client. There is no allegation of the Department that any data stored outside India have been retrieved or used by the appellant so as to qualify or fall under the category of Online Information and Database Access or Retrieval Service prescribed under Rule 9(b) of the Place of Provision of Service Rules, 2012.
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The intermediary is a broker or an agent who arranges or faciliti
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oviding taxable services under the category of 'Business Support Service' and 'Market Research Agency Service', for which they are registered with the Central Excise Department. Since the services are exported, during the period from April to Sept, 2015, they have filed 7 quarterly refund claims totalling to ₹ 43,09,934/- claiming refund of Service Tax paid on various input services used in providing taxable output service under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE(NT) dated 18.6.2012. On scrutiny of the said quarterly refund claims, discrepancies were noticed and communicated to the appellant, accordingly. On the basis of the statements made by the appellant, the adjudicating authority sanctioned the total claim of ₹ 34,58,451/- and rejected the balance amount. The Revenue filed an appeal against the said order before the learned Commissioner (Appeals), who in turn, allowed the Revenue's appeal. Hence, the assess
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vices provided by the appellants are IT Enabled Services, whereas services rendered by the assessee falls under the scope of Rule 9 of the Place of Provisions of Service Rules, 2012. Hence, there was no export of service. In contrast of the said ground, the learned Commissioner (Appeals) observed that the respondent is an intermediary and the place of provisions of service is within India, since the service provider is situated within India, accordingly the services rendered by the appellant is not an export service. It is his contention that neither they are providing Online Information and Database Access Retrieval service nor act as an intermediary, hence Rule 9 of the Place of Provisions of Service Rules, 2012 cannot be made applicable to their case. It is his submissions that the facts in the present case satisfy Rule 3 of the Place of Provisions of Service Rules, 2012, inasmuch as services provided by the appellant relates to Development and Maintenance of Software for the foreig
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of the Service Tax Rules, 1994 and accordingly eligible for refund of the CENVAT Credit availed on inputs used in providing the taxable output service claimed to have been exported during the period April, 2013 to Sept, 2015. The adjudicating authority has allowed the refund claim holding that the services rendered by the appellant to their counterpart situated outside India being an export service. As per the Internal Services Level Agreement between the appellant and their client, precisely, the service provider is required to render services, namely, development of various softwares and maintenance of such software supplied to the foreign client. There is no allegation of the Department that any data stored outside India have been retrieved or used by the appellant so as to qualify or fall under the category of Online Information and Database Access or Retrieval Service prescribed under Rule 9(b) of the Place of Provision of Service Rules, 2012. Also their case cannot be called as
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sioner (Appeals) that the appellant is an intermediary is without any basis and therefore, not sustainable in law. On the other hand, I am of the view that the services rendered by the appellant to the foreign clients squarely fall under Rule 3 of the Place of Provision of Service Rules. 7. The reference of the judgment of the Hon'ble Supreme Court in Tata Consultancy Services' case (supra) by the learned AR is misplaced inasmuch as in the said case, the Hon ble Supreme Court has held that import of software containing in a Disc be considered as goods and accordingly subject to customs duty. No such situation is existed in the instant case. Hence, the said judgment is not applicable. 8. In these circumstances, the impugned order is set aside and the order passed by the adjudicating authority is restored. Appeal is allowed with consequential relief, if any, as per law. (Dictated and pronounced in Court) – Case laws – Decisions – Judgements – Orders – Tax Management India – tax
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