TaxTMI 
TaxTMI 
2024 (12) TMI 678
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....it of Rs.1,14,55,997/-under Notification No.27/2012; the lower authorities allowed a refund of Rs.1,08,06,910/- on ITSS and rejected refund of Rs.6,49,068/- on BSS; on an appeal filed by the appellants, learned Commissioner (Appeals) vide impugned order dated 31.01.2019 remanded the cases back to the Adjudicating Authority while holding that: * The Adjudicating Authority has wrongly rejected the refund claims by classifying the ITSS as Intermediary Services that the appellants are eligible for the refund of the same; * The Adjudicating Authority has rightly rejected the claim of the appellants for refund of CENVAT credit on export of BSS holding that the appellants were intermediary. * The appellants are not eligible for refund where Foreign Inward Remittances Certificates were not provided. 2. Against the impugned order, Department is in appeal (ST/60652/2019) against the grant of refund on ITSS while the appellants are in appeal (ST/60579/2019)against the refund rejected in respect of BSS. 3. Shri Deepak Thackur, learned Counsel for the appellant, submits that the appellant satisfies each of the conditions mentioned in the CENVAT Credit Rules and ....
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.... appellants as per the agreement are clearly ITSS; Revenue simply states that the appellant is arranging and facilitating the service between M/s Saxo Bank, its branches and customers without any basis; Revenue fails in showing as to how development of software can be treated arranging and facilitating services between M/s Saxo Netherland and their customers. 6. Shri Shivam Syal, learned Authorized Representative for the Department, reiterates the findings of the impugned order in respect of the appeal filed by M/s Saxo India Pvt. Ltd. and grounds of appeal in respect of Revenue‟s appeal. He submits that vide Deficiency Memo cum Show Cause Notice dated 25.07.2018, appellants have been informed very clearly the deficiencies in the refund applications. He takes us through the Education Guide and presents the Department‟s case. 7. Heard both sides and perused the records the case. Brief issue that requires to be addressed in the case is as to whether the appellants have rendered intermediary services in respect of services provided by them and as to whether the non-submission of FIRC certificates would dis-entitle them to the claim of refund. We find that it is benef....
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....s to another person cannot be considered as supplier of intermediary service. 3.3 Intermediary service provider to have the character of an agent, broker or any other similar person: The definition of "intermediary" itself provides that intermediary service provider-means a broker, an agent or any other person, by whatever name called...". This part of the definition is not inclusive but uses the expression "means" and does not expand the definition by any known expression of expansion such as "and includes". The use of the expression "arranges or facilitates" in the definition of "intermediary" suggests a subsidiary role for the intermediary. It must arrange or facilitate some other supply, which is the main supply, and does not himself provides the main supply. Thus, the role of intermediary is only supportive 3.4 Does not include a person who supplies such goods or services or both or securities on his own account: The definition of intermediary services specifically mentions that intermediary "does not include a person who supplies such goods or services or both or securities on his own account". Use of word "such" in the definition with reference to ....
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....I find that the assessee is engaged in the provision of ITSS services and Business Support Services to its overseas clients. Under IT Services they are engaged for upgrading software applications, providing software support and other related services. Their services are confined to developing certain components of the main software. Their work mainly involves coding, testing, handling queries etc. Under BSS Service, the assessee is engaged in performing corporate treasury, accounting, market data management, reconciliations and similar services as per the Service Level Agreements with its associates through its shared service centre. As per Rule 6A mentioned above, I find that in case of the assessee, the provider of service is located in the taxable territory, the recipient of service is located outside India and that the service provided by the services not covered under negative list of services. Therefore, the place of provision of the service, receipt of convertible foreign exchange and the point of separate entity in accordance with item (b) of Explanation 3 of clause (44) of section 65B of the Act needs to be discussed. In order to determine the place of pr....
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....xo Bank A/s, Denmark and not to any other overseas group entity. These services mainly related to upgrading of various software applications/components, besides providing other services like software support, software project management service as per the instructions of Saxo Bank A/s, Denmark. Their work mainly involves coding, testing, handling queries etc. I find that the above said service of ITSS provided by the appellant to its overseas client is mainly as per the requirement of the Client and there does not appear to be involvement of any third party to this extent. The ITSS services undertaken by the appellant are strictly in accordance with the instructions/requirement of their overseas client M/s. Saxo Bank A/s, Denmark only and hence do not appear to have any intermediary which would make it come under the preview of intermediary services. Thus, I find that the adjudicating authority has wrongly rejected the refund claims by classifying the said ITSS services as an intermediary and the appellant's refund claim is allowable to this extent. 10.1. In respect of BSS, he finds that they are intermediary service observing that : On perusal of above Service leve....
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....ts are in the nature of intermediary, without going into the various clauses of the agreements. 12. We find that as per the clauses of the agreement what is mentioned as customer is none other than the foreign principal i.e. Saxo Bank, Netherlands as made clear under Service Level Agreement: Between (Customer) - Saxo Bank Netherlands Strawinskylaan 1527, Tower B, Level 15, grid TB- 15090/111, 1077XX Amsterdam, Netherlands AND (Provider) - SAXO Accounting Center Saxo IT India Pvt. Ltd. 20th. Floor, Tower 10C Cyber City, DLF Phase II Gurgaon-122 002 Haryana India. This being the position, it is not correct for the appellate authority to hold that the appellants are rendering services to the customer of their foreign principal. 13. We find that Hon‟ble Punjab & Haryana High Court in the case of Genpact (P) Ltd. (supra) has gone into the issue of Intermediary and has enunciated the principle as follows: 28. As per definition of "intermediary" under Section 2(13) of the IGST Act the following three conditions must be satisfied for a person to qualify as an "intermediary"; - 29. First, the relationship between the parties must be that of....
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....hird party directly in touch with the service recipient and arranging for the supply of goods or services. 24. Thus, even if it is accepted that the petitioner has rendered services on behalf of a third party, the same would not result in the petitioner falling within the definition of „intermediary‟ under Section 2(13) of the IGST Act as it is the actual supplier of the professional services and has not arranged or facilitated the supply from any third party. 16. We find that the impugned order mistakenly categorizes the services rendered by the appellants on the basis of Place of Provision Rules. We find that Tribunal in the case of M/s Blackrock Services (India) Pvt. Ltd. (supra) observed that : 7. Admittedly the refund claims have been filed by the appellants under Rule 5 ibid r/w Notification No. 27/2012, dated 18-6-2012. The said rule provides for refund of accumulated Cenvat credit in respect of goods and services exported under bond or undertaking. This rule is very specific and lays down how to determine the quantum of admissible refund from the accumulated Cenvat credit. It cannot be considered to be a proceeding for denial of Cenvat credi....