Intermediary classification rejected for overseas crew management service, preserving export treatment and refund eligibility.

A seafarers recruitment and crew management service was held not to be intermediary service because the provider independently selected, trained and supplied crew on a principal-to-principal basis to an overseas client, rather than arranging or facilitating a supply between two other persons. On that reasoning, the place-of-provision rule invoked by the department did not prevent export treatment, and the refund claim of accumulated CENVAT credit under the refund notification remained maintainable. The rejection of refund, including the appellate confirmation, was set aside and refund with applicable interest was directed.

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Issues: Whether the appellant, engaged in seafarers recruitment and crew management for an overseas client, was an intermediary so as to be denied refund of accumulated CENVAT credit under the refund notification.

Analysis: The agreement and surrounding facts showed that the appellant selected, trained, and supplied crew members on a principal-to-principal basis, while the overseas client independently recruited and employed them for ship management. The relationship did not amount to brokerage, agency, or facilitation between two persons contemplated by the intermediary definition. On that basis, the service was not treated as intermediary service and the place-of-provision rule relied on by the department did not defeat export treatment. Consequently, the refund claim under the notification read with the CENVAT Credit Rules was maintainable.

Conclusion: The issue is decided in favour of the assessee; the appellant was not an intermediary and was entitled to the refund claim.

Final Conclusion: The rejection of refund and the appellate confirmation were set aside, and the refund with applicable interest was directed to be paid.

Ratio Decidendi: A service provider who independently recruits, trains, and supplies manpower to an overseas recipient on a principal-to-principal basis, without arranging or facilitating a supply between two other persons, is not an intermediary for the purpose of denying export-refund benefits.

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