TaxTMI 
TaxTMI 
2017 (11) TMI 659
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....r refund applications towards refund of unutilized cenvat credit of input services used for export of services in terms of Rule 5 of Cenvat Credit Rules,2004 readwith Notification No.27/2012 CE (NT) DT. 18.06.2012. The Respondent claimed that the services were exported to their client M/s Facebook Ireland Limited during the period January, 2014 to December, 2014. The claim for the period January to March 2014 and April to June 14 were partly sanctioned whereas the two claims pertaining to period i.e July to Sep 14 and Oct to Dec 14 were rejected on the ground that the services of BSS provided by the Respondent to M/s Facebook does not qualify as export of service. The Respondent filed appeals against the rejection of the claim whereas the revenue filed appeals against sanctioning of claims. The Appellate Commissioner allowed the appeals filed by the Respondent whereas the appeals of the revenue were rejected. 3. Hence all the present appeals by Revenue. 4. The Revenue has filed appeal on following grounds : 4.1 The Respondent provide SMS Aggregator services to Facebook within India. The SMS Messages are sent to subscribers of facebook as directed by Facebook. The assessee provid....
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.... entered into agreement with M/s Facebook. They are engaged in activity of sending or receiving SMS to/ from the Indian subscribers of Facebook by using a direct internet connection between the Respondent and Facebook. They collect all the SMS message from Facebook's application collection point specified by the Facebook's and each telecom operator's SMS-C and Facebook's point of entry as applicable. They transmit MT or SMS message originated by Facebook to a subscriber via the Webaroo network and an operator's SMS-C to subscriber and also transmit MO or SMS messge originated by a subscriber to Facebook via and operator's SMS-C and the Webaroo network. All deliverables are property of facebook. All users, usage and other data generated or collected in the course of providing the service shall be owned by Facebook. They perform service on behalf of facebook in the capacity of independent contractor. They are raising monthly bill to Facebook based on delivery report without indicating the service tax and the payment is received in Foreign convertible currency from Facebook towards these services. They are working as an aggregator/ facilitator of all SMS's ....
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.....20/13-14 ST-I dt. 10/02/2014 issued by the Commissioner of Service Tax Mumbai in case of service tax on bank charges paid by foreign banks, clarified that, for a person to be treated as recipient of service, it is necessary that he should know who the service provider is and there should be an agreement to provide service which may be oral or written. That for a service to be treated as a service commercially there is need for consideration which in no case is received by the Respondent from receivers of SMSs. The subscribers of Facebook are not concerned with the activity of Respondent. 5.3 He submitted that the proviso to rule 3 of Place of Provision of Service Rules, 2012 does not apply to present case as it categorically states that where the location of the service recipient is not available in the ordinary course of business, the place of provision shall be the location of the recipient of service. In terms of definition of location of the service receiver provided in rule 2 (i) of POP Rules wherein it is stated that location of service provider is premises for which service tax registration has not been taken then the location of his business establishment. The business lo....
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.... Ireland they have to provide the service to M/s Facebook which is in the nature of aggregator of SMS to the Indian subscribers of M/s Facebook Ireland. The Respondent is liable to provide the SMS Aggregator service to M/s Facebook i.e Application programming Interface (API) connected with Facebook Server. The Respondent is working on directions and Instructions of Facebook. The facebook initiates the transmission of SMS from their server located outside India through Respondent's API connectivity and respondent provides the services to M/s Facebook by sending or receiving SMS to subscribers of Facebook located in India. The Respondent is thus working as aggregator/ facilitator of all SMSs either originating from Facebook or subscribers of Facebook to transmit between them as direction and discretion of facebook. The Facebook pays service charges to the Respondent for such services. In this whole process the Respondent neither interacts with the subscribers of the Facebook nor has any connection/ relation/ concern with the said subscribers. They are barred from any relation with the subscribers of Facebook. Under the terms of agreement we find that the Respondent is getting pai....
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....cebook. Even the Trade Notice No. 20/13 14-st-1 dt. 10.02.2014 issued by Commissioner, Service Tax Mumbai with reference to services provided by Foreign Bank relied upon by the Respondent clearly states that in case of services provided by the Foreign bank cannot be labeled as having been provided to importer or exporter as for a person to be treated as recipient of service, it is necessary that he should know who the service provider is and there should be an agreement to provide service, which may be oral or written. The importer and exporter does not even know who the service provider is, as they are not aware of the identity of the foreign banks which would be providing services. Exporter or importer in India does not have any formal or informal agreement with the foreign bank. Importer or exporter in India does not even know the quantum of charges which the foreign bank would be recovering. Therefore, in view of the above mentioned factual position and also in view of the various articles of URC 522/UCP 600, it is clear that services provided by the foreign bank to the bank in India. Going by the same analogy we find that the above facts are also applicable to the present tran....
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.... & Financial Service Companies [2010 (20) S.T.R. 417 (S.C.)]. 7.2 The aforesaid decision was relied upon by the Tribunal Divisonal Bench in case of M/s Vodaphone Essar cellular Ltd. - 2013 (31) STR 738 (TRI) holding as under : Rebate Export of services Telecom service provided in India to International in-bound roamers registered with foreign telecom network operator Payment received from impugned foreign telecom operators in convertible foreign exchange HELD : No contract/agreement between assessee and subscriber of foreign telecom operator Therefore foreign telecom service provider paying for services as recipient of service Telecom services falling under category III Export of Services Rules, 2005 Transaction constituting export since services rendered to foreign services provider located abroad Board Circular clarifying benefit accruing to foreign service provider as subscriber billed for services rendered Ratio of Tribunal's decision in Paul Merchants [2013 (29) S.T.R. 257 (Tribunal)] squarely applicable Subscriber of foreign telecom service provider not recipient of service Rule 3(1)(iii) of Export of Service Rules, 2005. 7.3 The various benches of Tribunal has adopt....