The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal, ruled that Charging of Costs Plus would make an intermediary, thereby granting Cenvat Credit to Blackberry India Private Limited.
The appellant, Blackberry India Private Limited (Formerly Known as Research in Motion India Private Limited) is a company incorporated in India and is engaged in the provision of marketing, administrative and support service to Blackberry Singapore in relation to Blackberry products and for this purpose, the appellant entered into an Agreement with Blackberry Singapore. The appellant is required to provide the services to Blackberry Singapore in relation to technical marketing assistance of Blackberry products.
A show cause notice was issued to the appellant to show cause notice as to why the refund claims should not be rejected for the reason that the services provided by the appellant were intermediary services.
The Assistant Commissioner, rejected the refunds claim primarily for the reason that the appellant provided intermediary service and, therefore, in terms of the Rule 9 of the Place of Provision of Services Rule 2012, the place of supply of services would be the location of the service provider i.e. in India and, therefore, appellant would not fulfill the condition set out in rule 6A of the Service Tax Rules 1994.
The Commissioner (Appeals) held that the appellant facilitated the services between the Indian customer and foreign firms and, therefore, the activity performed by the appellant would be that of an intermediary. Hence the present appeal has been preferred challenging the order.
An intermediary is a person who arranges or facilitates provision of the main service between two or more persons. The appellant is not involved in the arrangement or facilitation of the supply of service. The service provided by the appellant qualify for export since it is providing services to Blackberry Singapore, which is outside India and is receiving convertible foreign exchange for such services.
A Coram consisting of Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “The appellant is not privy to the Agreement entered into between Blackberry Singapore and its end customers. Merely because the appellant is charging Costs Plus on Blackberry Singapore would not mean it is an intermediary and the refund claimed by the appellant under Rule 5 of the Credit Rules could not have been rejected by the Commissioner (Appeals).”
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