TaxTMI 
TaxTMI 
2025 (7) TMI 339
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....-in-Original 27.02.2018 3 Demand confirmed in Impugned Order a. Service Tax: Rs. 1,06,73,368 b. Interest: under Section 75 c. Penalty: Rs. 1,06,73,368 Section 78 4 Show Cause Notice 03.11.2016 5 Sales and Marketing Support Agreement 15.08.2005 3. The brief facts are the M/s. Infineon Technologies (I) Pvt. Ltd., the Appellant is a 100% Export Oriented Unit ("EOU") registered with the Software Technology Parks of India (STPI) scheme and is primarily engaged in providing 'Research and Development' services and 'Marketing Support' services to their parent entity, M/s. Infineon Technologies Asia Pacific Pte Ltd. Singapore (ITAP) located outside India. In order to provide such services, the Appellant entered into a service agreement dated 15.08.2005 with ITAP. 4. Considering that the place of provision of the aforesaid services provided by the Appellant to the overseas entity, i.e., to their parent entity, Infineon Technologies Asia Pacific Pte Ltd. Singapore (ITAP), was the location of the ITAP (service recipient) located outside India in terms of Rule 3 of the Place of Provision of Services Rules, 2012 (POPs Rules, 2012) w.e.f. ....
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....The details of both the appeals (in relation to the demand issue) are as tabulated below for ease of reference: S.No. Appeal Nos. SCN / SOD Period Demand Amount(Rs.) 1 ST/21310/2018 SCN dated 03.11.2016 October 2014 to March 2015 1,06,73,368/- 2 ST/21311/2018 SOD dated 17.02.2017 April 2015 to September 2016 4,30,98,787/- 3 Total 5,37,72,155/- 9. Further, in terms of Rule 5 of the Credit Rules, the Appellant was also eligible to claim refund of the unutilized CENVAT Credit availed by it on inputs and input services used for the provision of the export of services. 10. However, the Department rejected the Appellant's refund claims on the ground that the services provided by the Appellant to M/s. Infineon Technologies Asia Pacific Pte Ltd. Singapore (ITAP) under the Services Agreement did not qualify as exports. Aggrieved by such rejections, the Appellant approached this Tribunal by filing the appeals as tabulated below: Sl. No. Appeal Nos. OIA Nos. Period Refund Amount 1. ST/20368/2021 139-2020-21-CT dated 27.01.2021 October 2009 to March 2010 5,50,257 2. ST/20363/2021 140-202....
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....persons (c) an 'intermediary' does not provide the service on his own account. 14. The learned counsel submits that the aforementioned principles are also outlined in the Education Guide issued by CBIC dated 20.06.2012 ("Education Guide"), and the same is reiterated in the clarification issued by CBIC vide the Circular No.159/15/2021-GST dated 20.09.2021. Furthermore, the above Circular issued under the GST Regime also states in Para 2.3 that there is broadly no change in the scope of 'intermediary services' in the GST regime vis-à-vis the Service Tax regime, thus the principles laid out by Circular No. 159 dated 20.09.2021 as discussed above are also applicable to the present dispute under Service Tax; none of the three conditions as mentioned above are fulfilled by the Appellant in the present case based on the following submissions. 15. In terms of the Service Agreement between the Appellant and ITAP, the Appellant is inter alia required to provide marketing, promotional and after-sales services to ITAP's customers in India. The scope of services is detailed in Annexue-2 to the Agreement. 16. Further, in terms of Article 5 of the Agre....
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....x, Bengaluru South Commissionerate [2021 (3) TMI 1202 Tri-Bangalore], wherein this Hon'ble CESTAT held that Sales and Marketing Support services provided by the company to its foreign entity in terms of the service agreement will constitute "export of services" not the 'intermediary' services. 22. Furthermore, the decision of the Hon'ble Punjab and Haryana High Court in Genpact India Pvt., Ltd. Vs. UOI & Ors. [TS-587-HC(P&H)-2022-GST] and the clarification issued by CBIC vide Circular No. 159 dated are also squarely applicable to the facts of the instant case, and therefore, the services of the Appellant qualify as export of services. A similar view was taken by various courts in the following cases: (a) SNQS International Socks Private Limited Vs. Commissioner of Central Excise and Service Tax, Coimbatore [2023 (11) TMI 898 Tri Chennai] affirmed by the Hon'ble Supreme Court in [2024 (3) TMI 1045 - SC Order] (b) Chevron Philips Chemicals India Pvt. Ltd. Vs. Commissioner of Central Tax, Navi Mumbai [2024 (15) Centax 102 (Tri. Mumbai)], as affirmed by the Supreme Court in 2024 (388) ELT 135 (SC)] (c) Chevron Philips Chemicals India Pv....
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.... introduced in 2012, and the provisions of the said rules are not applicable to the period covered by Appeal No. ST/20511/2022. Therefore, the impugned order is to be quashed on this ground alone. 27. The learned counsel submits that during the period 01.06.2007 to 31.05.2007, Rule 3(2) of the Export of Services Rules, 2005 provided that any taxable service under Rule 3(1) of the Export Rules would be considered as export if "such service is provided from India and used outside India." The said condition was omitted w.e.f. 27.02.2010. Accordingly, he submits that the condition relied upon by the Adjudicating Authority in the Order-in-Original dated 31.12.2019 is also a non-existent condition. 28. However, for the period prior to 27.02.2010, the learned counsel submits that the law is well settled by the judgement of the Hon'ble High Court of Bombay in the case of Vodafone Idea Ltd. Vs. Union of India [2022 (66) G.S.T.L. 63 (Bom.)] that "customer's customer cannot be your customer," i.e., in a supplier-recipient relationship, when services are further rendered by the recipient therein to its third-party customers, such third-party customers cannot be called the custome....
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....services of the Appellant should be decided based on Rule 3 of the POPS Rules (i.e., location of the customer with whom the contract for service is entered i.e. ITAP in this case, which is outside India). Based on the reasons detailed above, it is clear that all the conditions as stipulated in Rule 6A of the Service Tax Rules, 1994 are fulfilled and thus the services provided by the Appellant undoubtedly qualify as 'export of service'. The refund claims was wrongly restricted to the extent of CENVAT Credit availed in the ST-3 Return for the period for which the refund is filed. 32. In ST/20364/2021, the Appellate Authority rejected the refund claim for alleged mismatch in credit shown in ST-3 returns and amount claimed in refund claims. 33. In this connection, it is submitted that it is not under dispute that the entire amount of Rs. 1,55,92,616 (for which refund has been claimed) has been debited from the credit ledger. 34. Further, the law is well settled by the decision of this Hon'ble Tribunal in the case of Broadcom Research Pvt. Ltd. [2016 (42) STR 79 (T-Bang), which has been affirmed by the jurisdictional High Court in [2016 (43) STR 321 (Kar.)] that non....
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....lant and ITAP, inter-alia is required to provide marketing, promotional and after-sales services to ITAP's customers in India. We find that, for the period prior to 27.02.2010, the law is well settled by the judgement of the Hon'ble High Court of Bombay in the case of Vodafone Idea Ltd. Vs. Union of India [2022 (66) G.S.T.L. 63 (Bom.)] that "customer's customer cannot be your customer," i.e., in a supplier-recipient relationship, when services are further rendered by the recipient therein to its third-party customers, such third-party customers cannot be called the customers of the original supplier. Furthermore, for the period prior to 01.07.2012, the law is also well settled by a Larger Bench of the Hon'ble Tribunal, Mumbai in the case of Arcelor Mittal Stainless (1) Pvt., Ltd. Vs. Commissioner Service Tax Mumbai-II [2023 (8) TMI 107 - CESTAT Mumbai-LB] wherein it is held that in a case where the benefit of service is accruing outside India, the said service should qualify as export of service in terms of the Export Rules. The Larger Bench has further held that export of service would take place under Rule 3(1) of the Export of Services Rules, 2005 if a person res....
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....2(f) of Place of Provision of Services Rules, 2012 and therefore they are taxable has 'intermediary services' under section 65B(44) of the Finance Act 1994. 44. We find that in terms of Article 5 of the Agreement, the Appellant is explicitly restricted from making any representations, guarantees, or warranties on behalf of ITAP or otherwise incurring any obligations on ITAP's behalf. The Appellant is not authorized to negotiate or conclude any contracts for sale in ITAP's name or to bind ITAP or its Affiliates in any manner. The Appellant shall not hold itself out as having such authority and is expressly required to deny such authority. 45. We find that the appellant is providing only the marketing, promotional and after sales service to M/s. Infineon Technologies Asia Pacific Pte Ltd. Singapore (ITAP) customers in India the appellant is not permitted from entering into any contract with the customers of ITAP in India and therefore there is no relation between the appellant and the customers of ITAP in India. Further we find that in terms of Article 6 read with Annexure-3 of the Agreement, the Appellant receives a service fee on a cost-plus markup basis and d....