AI Drafter 
TaxTMI 
TaxTMI 
2022 (1) TMI 1125
X X X X Extracts X X X X
X X X X Extracts X X X X
....ook to set up (STLH) offices in India, recruit service company, advertisement agency and service staff, and appoint distribution partners for the state short listed for launch of Gionee mobile phones. (STLH) is also entered into separate contracts with the distributors for them to purchase the mobile phones from (STLH) and resale the same in the territory along with marketing and promoting the same (STLH) was to pay to the appellant service charges at the rate of 1% of the value of goods imported in India by these distributors in the first year and the service charges at the rate of 0.8% for the second year, these payments were made to the appellant in convertible foreign exchange. The appellant initially paid service tax for certain period on the amount of commission, they received from STLH classifying their service as "Business Auxiliary Service" but they stopped paying service tax after April, 2014 and sought refund of the service tax already paid by them for the earlier period on the ground that service provided by them to M/s STLH was export of service, therefore, no service tax was payable on such services. Initially, the refund claim was disallowed holding that the services....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing main service and not sale of goods. It is a submission that there is no basis to assume that the appellant has made this argument and argument is in teeth of fact of the case. It is the channel distributor partners who is responsible for receipt and sale of goods, import of goods as well as filing bill of entry and the appellant has no role to play in facilitating supply of goods. Further, in the impugned order, it has been assumed that the appellant is marketing and liaison office of STLH in India so the service provided by the appellant could not be export of service under Rule 6A(f) of Service Tax Rules, 1994. This allegation was not raised in the show cause notice. Further, the impugned orders are in contradiction with the order of the Commissioner (Appeal) wherein he has held that the appellant was exporting service as consideration received was in convertible foreign exchange and provider of service and recipient of service were not merely establishment of distinct person. In the impugned order, the lower authority arbitrarily disregarded these findings. There is no reason has been assigned in the impugned orders that service provided by the appellant facilitate in sale o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he first year and 0.8% in the second year onwards. The agreement entered between the appellant and STLH specified that the appellant has to bear all taxes relating to facilitating charges and income generation. This establish that services rendered by the appellant ultimately led to sale of goods i.e. mobile phones by STLH. It is the submission that the concept of intermediary service as defined under law requires some basic prerequisites, i.e. there are three parties in this arrangement , the appellant, STLH and distribution partners. There are two distinct supplies in case of intermediary service, oner the main supply and the ancillary service. The appellant has the character of an agent, broker or any other similar person which include a person who supplies such as on his account and payment is in form of commission. The nature of service cannot be determined on the basis of method allotted for quantification of service charges. She further submitted that the extended period of limitation is rightly invoked. 5. Heard the parties and considered the submissions. 6. On careful of consideration of the submission made by both the sides, we find that the fact which are admitted ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 2(f) of POPS Rules, 2012 which is reproduced here as under: "Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provisions of a service (hereinafter called the "main" service) or a supply of goods, between two or more persons, but does not include a person who provides the main service or supplies the goods on his account." 10. We find that the appellant is nowhere providing services between two or more persons. In fact, the appellant is providing services to their clients namely banks/colleges/university who are paying commission/fees to the appellant. The appellant is only facilitating the aspirant student and introduced them to the college and if these students gets admission to the college, the appellant gets certain commission which is in nature of promoting the business of the college and for referring investors borrow loan from foreign based bank to the people who wishes settled in Canada on that if the deal matures, the appellant is getting certain commission. So the nature of service provided by the appellant is the promotion of business of their client, in terms, he gets commission which is....