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2015 (10) TMI 2460 - CESTAT MUMBAI

2015 (10) TMI 2460 - CESTAT MUMBAI - TMI - Rejection of Refund Claim on input services Classification of Services - Business Auxiliary Service or Business Support Service? Services rendered in respect of legal requirements relating to the business and provide market data relating to the industry. - Appellant referred to CBEC Circular No. 59/8/2003 and stated that if provisions of Section 65A are followed services rendered by appellant would fall under category of Business Auxiliary Services .....

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classified in any of the manner specified in clause (a) or clause (b) it shall be classified under the sub-clause which occurs first among the sub-clauses which equally merits consideration, which in this case is the Business Auxiliary Services. Decision made in case of of mPortal (India) Wireless Solutions Pvt. Ltd. vs. Commissioner of Service Tax, Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT] followed Decided in favour of assessee. - APPEAL NO: ST/252/2011 - Dated:- 22-7-2015 - Shr .....

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VAT credit on the input services which were, according to the appellant, utilized for the export of service. Subsequently find that there could be an error, they revised the refund claim to ₹ 23,59,331/- and claimed that the services rendered by them as per agreement was to M/s. eBay International, situated in Switzerland. The lower authorities issued a show cause notice dated 17/07/2007 proposing to reject the said refund claim. Appellant contested the said show cause notice on merits and .....

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into effect from 01/05/2006 and accordingly for the period in question the refund claim is ineligible to be granted as the Business Support Service was not a taxable service. Being aggrieved by the said decision, appellant preferred an appeal before the first appellate authority and the first appellate authority also concurred with the views of the adjudicating authority and rejected the appeal. 3. Learned Sr. Advocate appearing on behalf of the appellant would take us through the agreement ente .....

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iness Auxiliary Services and he would gainfully refer to the CBEC Circular No. 59/8/2003 dated 20/06/2003, specifically paragraph No. 2.1.3, first bullet point. He would also point out that the dispute as to the fact that the services which are rendered by them to eBay International, Switzerland are paid in the form of cost plus mark up of 8%. He would also draw our attention to the provisions of Section 65A of the Finance Act, 1994 which provides for classification of the services in different .....

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he appellant to eBay International, Switzerland. It is his submission that the services rendered by the appellant would appropriately fall under Business Support Services for the purpose of which he refers to the impugned order and submit that the services rendered by the appellant are mostly in respect of legal requirements relating to the business and provide market data relating to the industry. It is their submission that the prioritization of the services rendered itself would indicate that .....

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atio is applied CENVAT credit availed by the appellant on the input services has to be refunded as per the provisions of Rule 5 of the CENVAT Credit Rules, 2004. 6. We have carefully considered the submissions made by the both the sides and perused the records. 7. The undisputed facts are that the appellant here is a STPI unit registered with the authorities. They are rendering services to eBay International, Switzerland by getting services, which are input services from various service provider .....

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Business Auxiliary Service and Business Support Service and provisions relating to classification of services as discussed above. I find that the various services provided by the appellant falls under Business Auxiliary Services as well as Business Support Services as below. The services are as per clause 3.1of the agreement dated 17.3.2005:- 9. Scope of service as per agreement Classification a. Suggest to eBay International, all pertinent legal requirements relating to business for the servic .....

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ational, prepares and discuss budgets or other similar matters relating to the service provider territory and provide market data, as may from time to time be requested by ebay International; Business Support Service f. Perform local customer support activities as specified by eBay International; Business Auxiliary Service Sub-clause (iii) g. Furnish such reports and information relating to its activities as may be requested from time to time by ebay International during term of this aqreement; .....

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produced findings that the appellate authority has come to the conclusion that the services rendered by the appellant were in respect of evaluating prospective customers, processing of orders, etc. We find that CBEC vide circular No. 59/8/2003 dated 20/06/2003 at paragraph 2.1.3 first bullet point has clarified as under: 2.1.3 Certain doubts have been raised in case of business auxiliary services. In this regard the following is clarified,- * While it is not possible to give an exhaustive list o .....

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prospective customer, processing of purchase order etc would also be covered under service tax, as the law specifically provides for inclusion of such services as business auxiliary support services. 11. It can be seen from the above reproduced clarification of the Central Board of Excise & Customs, the activities as undertaken by the appellant would be classifiable under Business Auxiliary Services. Such clarification of the Board was applicable to the period under dispute as the period un .....

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