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2020 (1) TMI 429 - AT - Service TaxRefund of unutilized CENVAT Credit - Rule 5 of CCR - business of software trading - Export of services - place of provisions rules - intermediary services - the place of provision of services for an ‘intermediary’ would be the location of the service provider. According to the Revenue, since the service provider is located in India, the provision of service by the respondent would not be “export of services”. HELD THAT:- In the present case, not only does the agreement specifically mentions that there is no relationship of principal and an agent between Microsoft and the respondent but it is also clear from the agreement that the respondent is free to sell the product at any price to the customer, though the price to be paid by the respondent to Microsoft is fixed. The agreement also provides that payment has to be made to Microsoft even if the customer does not pay the respondent. This is, therefore, a case where the respondent provides the service or supplies the good on his own account. The Assistant Commissioner, while rejecting the refund claim, of the respondent has, however, observed that nature of provision of service of the repondent is arranging and facilitating procuring main services and transmitting the same to their overseas customers and so it would be in the nature of “intermediary” service. In coming to this conclusion, the Assistant Commissioner noticed that the purchase orders received by the respondent from the overseas customers were being passed on to the Microsoft and that the invoices issued by the Microsoft reveal that they have mentioned the name of the end-user customer in the specific column provided for the purpose - The conclusions drawn by the Assistant Commissioner are not correct. It cannot be doubted that two separate transactions had taken place. On the basis of the purchase orders placed by the overseas customers, the respondent purchased the software license from Microsoft for which it made payments to Microsoft. The tax invoice of Microsoft is billed to the respondent. The address of the Indian affiliate of end customer is shown to be in India. The Respondent receives the payment from the overseas customers. The payment made to Microsoft is independent of any payment received by the respondent from the overseas customers. There is, therefore, no error in the finding recorded by the Commissioner (Appeals) that the respondent is not an “intermediary”. The Commissioner (Appeals) may not have referred to the invoices, but he has referred to the balance sheet of the respondent. The invoices do not indicate that the respondent would be an “intermediary”. In fact they only support the case of the respondent that it is not an “intermediary”. The Channel Agreement has been taken into consideration by the Commissioner (Appeals) and therefore, the Appellant is not correct in contending that it has not been taken into consideration - In such a situation, when service is provided by the respondent on its own account, the respondent cannot be called an “intermediary”. Thus, the provision of service provided by the respondent has to be treated as “export of service” under Rule 6A of the 1994 Rules. The two reasons pressed by the Appellant for not treating it as export of service cannot be accepted. Rule 9(c) provides that in the case of ‘intermediary services’, the place of provision shall be the location of the service provider. This Rule would not be applicable as the respondent is not an intermediary. Refund is to be allowed - appeal dismissed - decided against Revenue.
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