TaxTMI 
TaxTMI 
2018 (11) TMI 1085
X X X X Extracts X X X X
X X X X Extracts X X X X
....nviting foreign university delegates to such fairs; A departmental investigation occurred and it was viewed by the Department that the appellants rendered taxable services under the category of "Intermediary Agent" and received commission/referral fee from foreign universities and failed to discharge the service tax on the consideration received as per the "Place of provision of services Rules, 2012" during the period 2014-15 to 2015-16 (up to Sep. 2015) (hereinafter referred to as the material period). In view of the above revelations, a show cause notice was issued in F.No. INV/DGCEI/HZU/ST/77/2015 (in O.R. No. 03. 03/2015-16 ST dated 18.04.2016 by the Pr. Additional Director General DGCEI, Hyderabad Zonal Unit, Hyderabad requiring the appellants to show cause to the Pr. Commissioner/Commissioner, Service Tax Commissionerate, Hyderabad. The Notice proposed a tax demand of Rs. 1,22,30,081 under Section 73(1) of the Finance Act, 1994 along with the applicable interest payable thereon under Sec. 75 ibid and penalties under Sec. 76 and 77 ibid. A corrigendum dated was issued to the above notice making it answerable to the Joint/Additional Commissioner of Service Tax, Service Tax Comm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ersity for two terms. He submits that these clauses have been interpreted by the 1st Appellate Authority as the services are rendered to the students in India, he would submit that identical issue came up before the Tribunal in the case of Sunrise Immigration Consultants Pvt Ltd Vs CCE & ST Chandigarh [2018-TIOL-1849-CESTAT-CHD] and in case of study Overseas Global Pvt Ltd vs CST [2017 (3) GSTL 443 (Tri-Del)]. He submits that both the judgements have held that the amount received by the appellant therein for referral purposes are not taxable. It is his further submission that appellant is not facilitating any education services which is the main service being provided by foreign universities. Hence the activity does not fall under the ambit of intermediary as appellant is promoting awareness about the universities which is the only service provided by the appellant in the facts of this case. He would submit that appellant acted on principal to principal basis and there is no agency relationship as recorded by the 1st Appellate Authority in the impugned order and after taking us through the agreements submits that plain reading of the agreement indicates that there is no agency rela....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of Excelpoint systems (India) Pvt Ltd Vs CST Bangalore [2018(10)GSTL 254(Tri-Bang)] for the proposition that intermediary services are covered for taxable purposes as provided in place of provision of Services Rules 2012. He would rely upon the decision of the Tribunal in the case of TVS Motor Co. Ltd Vs CCE Chennai [2012(28) STR 127 (Tri-Che)] for the proposition that assessee being promoter and marketer of services and auxiliary in chain of economic activity, hence, taxable under the Finance Act 1994. 6. We have considered the submissions made at length by both sides and perused the records. 7. On perusal of records, we find that the issue in dispute is whether the service tax demand confirmed by the lower authorities is legally sustainable in the facts and provisions of law during the material period. The material period involved in the instant appeal is 2014-15 and 2015-16 (up to September 2015) i.e. post negative list regime. 8. Undisputed facts are that the appellant herein provides referral services to various foreign universities for which they receive an amount as commission/ referral fees. The activity of the appellant is to locate the candidates who wants to study a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e a person who provides the main service or supplies the goods on his account." 10........ So the nature of service provided by the appellant is the promotion of business of their client, in terms, he gets commissioner which is covered under Business Auxiliary Service which is not the main service provided by the main service providers namely banks/university. As the appellant did not arrange or facilitate main service i.e. education or loan rendered by colleges/banks. In that circumstances, the appellant cannot be called as intermediary......... 12. We further take note of the fact that the provisions of Rule 6A of the POPS Rules, 2012 has been declared ultra virus by the Hon'ble High Court of Delhi in the case of Association of Tour Operators (Supra). In that circumstance, also the appellant is not liable to pay services for referral service, therefore, the issue no. 1 is answered in favour of the appellant. Issue No. B Whether the referral services in question rendered by the appellant amount to export of service or not? 13. As discussed hereinabove in the proceedings paragraphs that the appellant is not an intermediary and the appellant is providing Business Auxiliary....
X X X X Extracts X X X X
X X X X Extracts X X X X
....therefore, they cannot be regarded as 'export'. 6. With the above background, we have heard the learned advocate Shri Parth on behalf of the appellant and learned DR Shri J.P. Singh on behalf of the Revenue. After having gone through the case record and submissions of both the sides, it appears that the appellant fulfils necessary conditions of Rule 3(1) of the Export of Services Rules, 2005, as in case of the subject services: (a) Recipient is located outside India; (b) Such services were provided from India to outside India; and (c) Compensation for services was received by service provider in convertible foreign currency. 7. It may be mentioned that CES TAT in case of Microsoft Corporation (I) (P) Ltd. v. comm. of S.T. - 2014 (36) S.T.R. 766 (Tri.-Del.) inter alia observed as below: "54. ... (i) That the Business Auxiliary Services of promotion of market in India for foreign principal made in terms of agreement dated 1-7-2005 amount to Export of Services and the Hon'ble Supreme Court decision in the case of State of Kerala and Others v. The Cochin Coal Company Ltd. - Manu/SC/0308/1960: 1961 (12) STC 1 (SC) as also Burmah Shell Oil Storage and Distributing Co. of India....