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TMI Blog2023 (9) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/2020 directed against the common order passed by the Commissioner (Appeals). The sum result of the aforesaid orders is that refund claimed by the respondent, M/s. SingTel Global (India) Pvt. Ltd. [SingTel] under Rule 5 of the CENVAT Credit Rules, 2004 read with the Place of Provision of Service Rules, 2012 [POPS Rules], of the unutilized input service credit of input services by SGIPL towards export of telecommunication services to Singapore Telecommunication Limited located in Singapore has been allowed. FACTUAL BACKGROUND: 2. In order to clarify the factual background, it is relevant to take note that the Commissioner (Appeals) vide order dated 31 January 2019 upheld the order dated 18 June 2017 passed by the Assistant Commissioner allowing a refund claim of Rs. 1,32,70,532/- for the period July, 2015 to September, 2015 in favour of the SGIPL and the appeal filed by the Revenue was dismissed, which was challenged by the appellant in appeal No. 52609/2019. 3. However, in the other two appeals, there is a slight twist to the tale inasmuch as the Assistant Commissioner declined the claim for refund by SGIPL and on challenge the Commissioner (Appeals) vide order dated 05 July 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed between SGIPL and SingTel and in light of relevant statutory rules as well as the decision of this Court in the case of Verizon Communications India Ltd. v. Assistant Commissioner of ST, Delhi-III 2018 (8) GSTL 32 (Del.) besides the decision of the CESTAT itself in M/s. Black Rock Service India Private Ltd. v. Commissioner of CGST Service Tax Appeal No. 61877/2018 decided on 08 August 2022, held that there was no scope for doubt that services provided by SGIPL do not qualify as 'intermediary services' and the services are provided by it out of its own account to SingTel. Accordingly, SGIPL has been held entitled to claim refund totalling Rs. 13,32,91,031/- for the period July, 2015 to June, 2017 towards CENVAT credit. 8. On filing of the instant appeals before this Court, advance notice was issued to the respondent and the learned counsel for the respondent has opposed the appeals. Ms. Sonu Bhatnagar, learned Standing Counsel for the appellant has vehemently urged that in terms of Rule 9 of the POPS Rules, the place of provision of services is stipulated to be the location of the service provider and on a combined reading of the said provision along with Rule 2(f) of the POPS R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and Others v. State of Kerala (2000) 6 SCC 359, wherein the legal impact of pendency of the special Leave petition was explained as under: "(1) While hearing the petition for special leave to appeal, the Court is called upon to see whether the petitioner should be granted such leave or not. While hearing such petition, the Court is not exercising its appellate jurisdiction; it is merely exercising its discretionary jurisdiction to grant or not to grant leave to appeal. The petitioner is still outside the gate of entry though aspiring to enter the appellate arena of the Supreme Court. Whether he enters or not would depend on the fate of his petition for special leave; (2) If the petition seeking grant of leave to appeal is dismissed, it is an expression of opinion by the Court that a case for invoking appellate jurisdiction of the Court was not made out; (3) If leave to appeal is granted the appellate jurisdiction of the Court stands invoked; the gate for entry in the appellate arena is opened. The petitioner is in and the respondent may also be called upon to face him, though in an appropriate case, in spite of having granted leave to appeal, the Court may dismiss the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice when the place of provision of service is outside India. As per Rule 3 of the POPS Rules, the place of provision of a service shall be the location of the recipient of service. However, vide Rule 9(c) of POPS Rules, the place of provision for "Intermediary services" would be the location of the service provider. The term "intermediary" has been defined in rule 2(f) as follows: "2(f) Intermediary' means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the 'main' service) or a supply of goods, between two or more persons, but does not include a person who provides the main service or supplies the goods on his account." 15. It is pertinent to mention here that vide a communication dated 16 March 2012 by the Department of Revenue (Tax Research Unit), the term "Intermediary" services has been explained as follows: "3.7.7 What are "Intermediary Services"? 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 invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith two supplies at any one time namely: (i) the supply between principal and the third party; (ii) the supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. 17. It is borne out from the record that while SingTel is a licensed telecommunication service provider in Singapore and on its own as well through a network of affiliates or suppliers, is engaged in providing telecommunication services to its registered consumers in Singapore and other foreign territories. On the other hand SGIPL, is a licensed provider of certain telecommunication services in India, which has undertaken to ensure seamless global telecommunication services to the customers registered with SingTel in Singapore and elsewhere. At this juncture, it would be expedient to refer to the relevant clauses/stipulations in the agreement dated 14 July 2011 executed between the parties, that read as under:- "3. Scope of Agreement 3.1 SGIPL agrees to supply and SingTel agrees to procure from SGIPL the Service in accordance with the terms and conditions of this Agreement. 3.2 SingTel shall place an order for such Services in the format mutually agreed by bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of such monthly invoices (or upon such other basis as the parties may mutually agree from time to time). 6.4 The Invoice shall be in US dollars and shall be accompanied by a statement detailing the Services to which the Invoice relates. Any changes to SGIPL's prices must be notified in writing to SingTel and will be applicable to those Services supplied after the date of serving such notice. 6.6 Notwithstanding that the above invoices are rendered, both parties agree that transfer pricing adjustments to prices may be made at any time in order to ensure that prices are at acceptable arm's length in accordance with transfer pricing legislation in the applicable country. Such transfer pricing adjustments may be computed on an aggregated basis (rather than identified to a specific transaction). When such adjustments are made by SGIPL to increase the price. SingTel agrees to pay the additional amounts including any applicable Indirect taxes. Where such adjustments result in a lower price, SGIPL will refund the applicable amounts to SingTel. xxxxxxxxxx 19. Independent Contractor 19.1 The Relationship of the parties to this Agreement shall always and only be that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules. This was answered in the affirmative. It was held that since the recipient of the service Verizon US was outside India, Verizon India rightly treated it as an 'export of service' and accordingly it was exempted from the liability of paying service tax. It was pointed out that the 'recipient' of services is determined by the contract between the parties and this would depend on who has the contractual right to receive the services and who is responsible for the payment for the services provided to the service recipient; there was no privity of contract between Verizon India and the customers of Verizon US; while such customers may be 'users' of the services provided by Verizon India but were not its recipients; even though Verizon India may have been using the services of a local telecom operator but that would not mean that the services to Verizon US were being rendered in India; and the place of provision of such service to Verizon US remains outside India. It is pertinent to mention that a reference was made to the decision of the Apex Court in the case of All India Federation of Tax Practitioners v. Union of India 2007 (7) STR 625 (SC), wherein the nature of servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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