The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai held that providing trained manpower to overseas customers is not an intermediary and allowed refund claims under the provision of CENVAT Credit.
The appellant is engaged in providing Ship Management service involving Crew Management to its foreign associated company based in Hong Kong. The service recipient has been appointed by a foreign vessel owner for their ship management activities. The appellant claimed a refund of its accumulated CENVAT credit from October 2016 to June 2017 as per provision contained in Notification No. 27/2012-CE(NT) dated 18.06.2012 issued under Rule 5 of the CENVAT Credit Rules, 2004 which was rejected on the ground that services rendered by Appellant were intermediary services. The Commissioner of CGST & Central Excise (Appeals-II), confirmed the rejection order.
It was observed that anyone who arranges or facilitates service between two or more persons, other than providing the main service, is an intermediary. From the agreement, it was found that only trained manpower supply work was done by the Appellant and the service recipient recruits that manpower after taking them into its fold and control and even pays salary to them directly.
Dr Suvendu Kumar Pati, Judicial Member viewed that the Appellant was not an intermediary since it provided trained manpower to its overseas customer who recruited them and engaged them in the ship owned by others through a separate Ship Management agreement and held that the appellant was entitled to get the refund of CENVAT credit claimed.
The Tribunal allowed the appeal by setting aside the order. Shri Vasant Bhat appeared for the Appellant and Shri Onil Shivadikar appeared for the Respondent.
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