Service Tax
TRT-2025-
Cestat Chandigarh
Date:-08-08-22
In:-
Issue Favourable to Tax Payer ?:-
Order Date: 8 August 2022
Facts-
- The Appellant, Black Rock Services are engaged in providing services to M/s. HLX, USA wherein the work inter-alia related to development of interface for Aladdin and is maintaining, troubleshooting and providing support on the platform.
- Application was filed by the appellant under Rule 5 of Cenvat Credit Rules, 2004 read with notification No. 27/2012 for refund of unutilized Cenvat credit availed on input service used in providing taxable services i.e. ‘business support services'.
- The aforesaid refund claims were rejected by the Adjudicating Authority vide Order-in-Original on the ground that the service provided by the appellant are “intermediary service” and therefore in terms of Rule 9(c) of Place of Provisions of Services Rules, 2012 the place of provision of service is in India.
- On appeal filed by the appellant, the learned Commissioner upheld the order passed by the Adjudicating Authority and rejected the Appeals filed by the appellant.
Issue-
- Whether the services provided by the appellant are intermediary services?
Order-
- The Tribunal observed that the support services provided by Appellant in relation to creation of clients account is limited to the performing of services on HLX systems and that too as a backend process. Further, there is no requirement of any interaction, whatsoever with the clients of HLX and for performing all these services on behalf of HLX, the appellant receives a pre-agreed consideration from HLX in convertible foreign exchange.
- There is nothing on record to show that the appellant is liasioning or acting as intermediary between the HLX and its clients. Therefore, the finding of the lower authorities that the appellant is an ‘intermediary’ is misplaced.
- It is astonishing to notice that although for earlier periods the then adjudicating authority allowed the refund claim of the appellant, but without looking into those orders and without giving any reason for not following the earlier orders, this time the concerned Authorities held otherwise by denying the credit.
- Further, placing reliance on the Appellant’s website by the Ld. Commissioner in the impugned order without confronting the appellant is violation of the principle of natural justice and also beyond the show cause notice as the show cause notice did not rely upon any such website.
- If the Revenue is not in agreement with the claims of the appellants then the Revenue ought to have initiated the proceedings against the appellants for demanding the Service tax in respect of taxable service provided by the appellants. Admittedly no such proceedings have been initiated by the Revenue, therefore in a way Revenue itself has allowed this taxable service provided by appellants as export of service.
- Hence, the Tribunal held that the orders of lower authorities denying refund of Cenvat Credit on impugned services are not sustainable in law.
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