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TMI Blog2024 (12) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... d with Notification No.05/2006-CE NT dated 14.03.2006. They have claimed a total refund of Rs.3,42,97,703/- for the period October 2015 to December 2015 in appeal ST/20181/2023 and Rs.13,46,28,475/- (5 refund claims) for the period April 2011 to September 2013 in appeal No.ST/20631/2023. All the refund claims were rejected by the adjudicating authority. Aggrieved by the same, they filed appeals before the Commissioner (Appeals), who in turn rejected their appeals. Hence, the present appeals. 3. Assailing the impugned orders, the learned advocate has submitted that in rejecting refund claims, the learned Commissioner (Appeals) held that the appellant is an 'intermediary', hence the services rendered to their foreign agency would not qualify as 'Export of Service' as envisaged in Service Tax Rules, 1994. He has submitted that under the Parent Subsidiary Agreement, Appellant undertakes software development for Microsoft Corporation (MS Corp.) under a bipartite arrangement. The software products owned by the MS Corp. require continuous development on account of the emerging technology trends. The deliverable of the appellant is in the form of developed software which is supplied to MS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Service' to M/s. Microsoft Corp., USA and Microsoft Mobile, Finland. 7. The Revenue rejected the refund claims solely on the ground that the services rendered by the appellant to Microsoft Corp, USA is not an 'Export of Service', which are in the nature of 'intermediary service'. Hence, the appellants are not allowed to claim the refund of the accumulated credit considering the service as export services. On going through the records, we find that the appellants had entered into an agreement with Microsoft Corp. for providing various services viz., online technical support service to the customers of Microsoft Corp. through mail, over phone, etc. In other words, they rendered services in the nature of after sales support or product warranty support services by an agreement with MS Corp. Thus, there is an agreement between the appellant and MS Corp and nowhere, they are connected with the customers of the Microsoft Corp in rendering such services. 8. This issue has been considered by this Tribunal more or less in a similar circumstances in the case of CCT vs. M/s. Informatica Business Solutions Pvt. Ltd., after analysing the judgment on the subject and taking note of the circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , held as follows:- 86.4. On an analysis of the above, I find that the services of: (a) identification of potential customers, (b) providing information and educating potential customers, (c) procuring information from the client in terms of their requirements, expectation regarding the pricing of the product, (d) passing on the information to their foreign company, (e) providing demonstrations and presentations to the customer on the application of the products (f) maintenance and support services for the products are provided to customers in the Asia-Pacific market and going by the tenor and tone of the agreement, it is clear that the relationship between Informatica USA and Informatica India is on a principal to principal basis (even para 36.2 of the SCN states that both are independent) and Informatica India is not acting as an agent or broker. Basically Informatica India is providing Business support services to Informatica USA and the place of provision of such services ought to be determined under Rule 3 of POPS and not under Rule 9 of POPS. 86.5. I find that though the SCN seeks to rely on certain clauses in the agreement, it has not brought out as to how on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IOL-1849- CESTAT-CHD]. The Tribunal considered whether the assessee would be an 'intermediary' with reference to the services provided to universities, colleges and banks and whether any service tax could be levied. The observations of the Tribunal are as follows : "10. We find that the appellant is nowhere providing services between two or more persons. In fact, the appellant is providing services to their clients namely banks/colleges/university who are paying commission/ fees to the appellant. The appellant is only facilitating the aspirant student and introduced them to the college and if these students gets admission to the college, the appellant gets certain commission which is in nature of promoting the business of the college and for referring investors borrow loan from foreign based bank to the people who wishes settled in Canada on that if the deal matures, the appellant is getting certain commission. So the nature of service provided by the appellant is the promotion of business of their client, in terms, he gets commission which is covered under Business Auxiliary Service which is not the main service provided by the main service providers namely banks/university. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Rule 2(f) of the Place of Provision of Service Rules, 2012. Under the 2012 Rules "intermediary services" were defined to mean 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 on his account. 37. A perusal of the definition of "intermediary" under the service tax regime vis-a-vis the GST regime would show that the definition has remained similar. Even as per circular dated 20-9-2021 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (GST Policy Wing), the scope of "intermediary" services has been dealt in Para 2 thereof. In Para 2.2 it stands clarified that the concept of "intermediary" was borrowed in GST from the Service Tax Regime. The circular after making a reference to the definition of "intermediary" both under Rule 2(f) of the Place of Provision of Service Rules, 2012 and under Section 2(13) of the IGST Act clearly states that there is broadly no change in the scope of "intermedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is determined by the contract between the parties and who has the contractual right to receive the service and who is responsible for the payment for the service and the department has lost sight of this essential difference. The High Court of Delhi then considered the decision of the Larger Bench of the Tribunal in Paul Merchants Ltd. vs. CCE, Chandigarh [2012 (12) TMI 424-CESTAT-DEL.-LB], which was rendered with reference to ESR, 2005 where the assessees were intermediary agents, providing money transfer services to foreign travellers, who were the end user on behalf of their principals and the contention of the department that this did not qualify as export of service was rejected referring to the CBEC clarification letter no. 334/1/2019- TRU dated 26.02.2010 that as long as the party abroad is deriving benefit from service in India, it is an export of service." xxxxxxxxxxxxx 16. Needless to mention, as per the agreement between the appellant and the foreign university the services were delivered outside India as the recipient of service is the foreign universities who are located outside India and the benefit of service rendered by the appellant also accrued outside India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is satisfied by the provision of service who has to be treated as recipient of the service, not the person or persons affected by the performance of the service. Thus, when the person on whose instructions the services in question had been provided by the agents/sub-agents in India, who is liable to make payment for these services and who used the service for his business, is located abroad, the destination of the services in question has to be treated abroad. The destination has to be decided on the basis of the place of consumption, not the place of performance of Service." 22. In Vodafone Essar Cellular Ltd. vs. CCE, Pune-III [2013 (7) TMI 178 - CESTAT- MUMBAI] the Tribunal explained the arrangement in the following words: "Your customer's customer is not your customer. When a service is rendered to a third party at the behest of your customer, the service recipient is your customer and not the third party. For example, when a florist delivers a bouquet on your request to your friend for which you make the payment, as far as the florist is concerned you are the customer and not your friend." 23. The aforesaid discussion leads to the inevitable conclusion that Grant Thornt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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