TMI Blog2019 (12) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... e said agreement. A plain reading of the same reveals that it is an agreement between the Appellant and the CPC Global and no mention of rendering of service to the clients of CPC Global or any other third party. For rendering such services, the appellants are entitled to commission stipulated under clause (5) of the agreement - It is the contention of the appellant that they did not act as an intermediary between the CPC Global and any other person while rendering the service of promotion of sale of the goods in the defined territory. The Appellant are neither concerned the fixation of selling price of the goods and their role is an independent contracting as stipulated under clause (10) of the said agreement. There is merit in the contention of the appellant that since goods was not covered under the scope of definition of intermediary , therefore, for the period prior to 1.10.2014 confirmation of demand is bad in law. I find that the definition of intermediary cannot be made applicable to sale of goods for the period prior to 01.10.2014 in view of the principle law laid down by the Tribunal in CRODA INDIA COMPANY PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX-VII MUMBAI [ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice, the Appellant has availed CENVAT Credit. Since the said services are exported, they have filed cash refund of accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004. Alleging that the service provided by the appellant is not an export service since they acted as an intermediary defined under Rule 2(f) of the Place of Provision of Services Rules, 2012 (POPS Rules in short), consequently as per Rule 9 of the said Rule the service provider is deemed to be situated in India, hence there cannot be export of service and accordingly cash refund of the credit is inadmissible; also (in Appeal No. 88913 of 2018) it is alleged that the input services are having no nexus with the output services exported, hence refund claim also not admissible. Aggrieved by the said order, they filed appeals before the learned Commissioner (Appeals), who in turn, rejected their appeals. Hence, the present appeals. 3. Learned Advocate for the appellant has submitted that under Sales Promotion and Agency Agreement dated 14.09.2009, the appellant had provided sale promotion services to the overseas entity i.e. CPC Global in respect of various chemical products. The detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e price, it cannot be a reason to describe the role of appellant as intermediary. In support, he has referred to the judgment of this Tribunal in the case of Sunrise Immigration Consultants Pvt. Ltd. Vs. CCE ST, Chandigarh 2018 (5) TMI 1417-CESTAT CHANDIGARH. 7. It is his contention that therefore the appellants are not rendering intermediary services within the meaning of Rule 2 (f) of the Place of Provision of Services Rules, 2012 and hence do not fall under Rule 9 of POPS Rules,2012. In support, he has referred to the judgment of this Tribunal in the case of Lubrizol Advanced Materials India Pvt. Ltd. Vs. Commissioner of Central Excise 2019 (1) TIM 720-CESTAT MUMBAI and M/s R.S. Granite Machine Tools Pvt. Ltd. Vs. CGST CE 2019 (1) TMI 1179-CESTAT CHENNAI. 8. The learned Advocate further submitted that in the impugned order, the learned Commissioner (Appeals) also had concluded that the services namely, Management and Business Consultant services, Business Auxiliary Service, Business Support Service, Membership of Club or Association, Convention Services, Renting of Immovable Property Telecommunication services, do not satisfy the definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round that the services rendered is not the export service under POPS Rules,2012 is contrary to the principles of law laid down by the Tribunal in the case of Holtek Asia Pvt. Ltd. 2018-TIOL-1888-CESTAT-MUM and also Softek India Pvt. Ltd. Vs. CST, Bangalore 2018-TIOL-816-CESTATBANG. 10. Per contra, the learned AR for the Revenue has submitted that the appellant is subsidiary of Chevron Phillips Chemical International Holdings LLC, USA. Chevron Phillips Chemical Group, manufactures and markets chemicals including olefins and polyolefins, specially chemicals and plastics. Olefins and polyolefins include products of Ethylene, Polyethylene, Normal Alpha Olefins etc. The appellant is providing marketing and promotion services in relation to petrochemical products manufactured by its group entities under the Sales Promotion Agreement dated 14.09.2009. Referring to the clarification issued by the Board on the scope of intermediary services, the learned AR has submitted that (a) An intermediary arranges or facilitates a provision of a 'main service' between two or more persons; (b) An intermediary is involved with two supplies a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing no nexus with the outputs services, hence, not an input service, consequently no cash refund under the said rule is admissible even though credit is allowed and not disputed. 14. The appellant by an agreement with overseas company CPC Global agreed to provide service of sales promotion of the chemicals in the territory specified in the said agreement. The detailed of services required to be rendered in connection with sales promotion in defined territory are stated under the clause (3) of the said agreement. A plain reading of the same reveals that it is an agreement between the Appellant and the CPC Global and no mention of rendering of service to the clients of CPC Global or any other third party. For rendering such services, the appellants are entitled to commission stipulated under clause (5) of the agreement. For the purpose of measure of the remuneration/consideration for rendering the service the measure is certain percentage of the sale price of the chemicals which is paid to the Appellant by CPC Global. It is the contention of the appellant that they did not act as an intermediary between the CPC Global and any other person while rendering the service o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice Rules, 2012, it is quite evident that service provided in relation to sale of goods by a commission agent cannot be classified as intermediary service. We are further supported in our view because para 5.9.6 of The Education Guide issued by the CBEC clearly states:- 5.9.6 What are Intermediary Services ? Generally, an intermediary is a person who arranges or facilitates a supply of goods, or a provision of service, or both, between two persons, without material alteration or further processing. Thus, an intermediary is involved with two supplies at any one time: i) The supply between the principal and the third party; and ii) The supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. For the purpose of this rule, an intermediary in respect of goods (such as a commission agent i.e. a buying or selling agent, or a stockbroker) is excluded by definition. Thus while it is true that intermediary includes intermediary in respect of sale of goods, but legislature has while framing these rules deemed it fit to exclude the intermediaries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord that the consideration received by the appellant for providing the services was based upon cost plus markup and is nowhere connected with the main supply of goods. In other words, the main supply may or may not happen and thus, cannot be directly correlated with the service provided by the appellant. Thus, the appellant is not acting as a bridge between the overseas group entities and supplies made to their customers in India and accordingly, it cannot be said that the appellant has provided intermediary service and should be governed under the provisions of Rule 9 of the rules. Also, in the case of R.S. Granite Machine (supra), this Tribunal has held as under: - 5. The facts of the case as analysed elsewhere in this order, make it clear that obtaining/procuring order for its foreign Principals is the main service rendered by the appellant and consequently, rigors Rule 9 vis- -vis Rule 2 (f) are not applicable. In view of the above, I am of the considered opinion that Rule 3 of POPS Rules would only apply and therefore the appellant cannot be fastened with tax liability. For the above reasons, demand as well as the impugned order are not sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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