2026-VIL-1182-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Export of Services or Intermediary – Appellant filed refund claims for accumulated Cenvat credit treating the services as export of services. The Refund Sanctioning Authority granted the refunds, but the Commissioner (Appeals) reversed the same by holding Appellant to be an 'intermediary' under Rule 2(f) of the POPS Rules, 2012, thereby denying the export benefit - Whether the Appellant qualifies as an 'intermediary' under Rule 2(f) read with Rule 9(c) of the Place of Provision of Services Rules, 2012 – HELD - An 'intermediary' is one who arranges or facilitates services for a third party, whereas in the present case, the Appellant directly provides services to the overseas principal on a principal-to-principal basis without any contractual relationship with the end customers. The jurisdictional High Court in the case of Appellant's group company, which had entered into an identically worded agreement, concluded that such entity is not an 'intermediary'. The Revenue did not challenge that judgment before the Supreme Court and subsequently granted refunds. Additionally, the Department's Circular No. 159/15/2021 clarifies that the provisions relating to 'intermediary' are similar under both Service Tax and GST regimes, rendering the High Court's judgment applicable to the Service Tax regime as well - An entity performing services directly for an overseas principal does not fall within the definition of 'intermediary'. The appellant is entitled to refund of accumulated Cenvat credit as the services qualify as 'export of services' - The impugned order is set aside and the appeal is allowed
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