Principal-to-principal service arrangements are not intermediary services, and export refund cannot be denied without a specific exclusion.

Services rendered on a principal-to-principal basis, involving promotional, marketing and technical support, were not intermediary services because the assessee did not arrange or facilitate a supply between the overseas recipient and its customers. The arrangement was confined to the assessee and the foreign recipient, with consideration on a cost-plus basis unrelated to downstream sales, so the intermediary classification failed. The court also held that services falling within section 65(105)(zzb) were not outside the export framework merely by reason of that classification; refund of unutilised CENVAT credit could not be denied unless the export rules specifically excluded the service. The Revenue's challenge failed and the refund entitlement was sustained.

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Issues: (i) Whether the services rendered by the assessee to the overseas recipient constituted intermediary services under the Place of Provision of Services Rules, 2012. (ii) Whether the assessee's services, including those falling under section 65(105)(zzb) of the Finance Act, 1994, were outside the scope of export of taxable services so as to deny refund of unutilised CENVAT credit for the relevant periods.

Issue (i): Whether the services rendered by the assessee to the overseas recipient constituted intermediary services under the Place of Provision of Services Rules, 2012.

Analysis: Intermediary service requires a person who arranges or facilitates a supply between two or more persons and does not itself provide the main service on its own account. On the contractual terms, the assessee was an independent contractor providing promotional, marketing, technical marketing assistance and allied services on a principal-to-principal basis. It was neither an agent or broker nor involved in arranging or facilitating any supply between the overseas recipient and its customers. The arrangement was only between the assessee and the overseas recipient, and the consideration was on a cost-plus basis unrelated to downstream sales.

Conclusion: The assessee was not an intermediary; this issue was answered in favour of the assessee.

Issue (ii): Whether the assessee's services, including those falling under section 65(105)(zzb) of the Finance Act, 1994, were outside the scope of export of taxable services so as to deny refund of unutilised CENVAT credit for the relevant periods.

Analysis: The exclusion applied by the adjudicating authority was based on a misreading of the Export of Service Rules, 2005. Services were within the export framework unless specifically excluded by the rule. The mere fact that the services were classifiable under section 65(105)(zzb) did not take them outside the scope of export of taxable services. The tribunal's view that the refund claim was maintainable was consistent with the statutory scheme.

Conclusion: The refund claim could not be denied on that ground; this issue was also answered in favour of the assessee.

Final Conclusion: No substantial question of law arose. The Revenue's challenge failed, and the assessee's entitlement to refund was sustained.

Ratio Decidendi: A service provider acting on a principal-to-principal basis and rendering substantive services on its own account is not an intermediary merely because the recipient uses those services in relation to customers abroad; export treatment cannot be denied unless the service is specifically excluded by the governing export rules.

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