Wacker Chemie India Private Limited Vs Commissioner of Service Tax (CESTAT Mumbai)
The CESTAT Mumbai allowed the appeals filed by Wacker Chemie India Private Limited against the Commissioner (Appeals)’ order that had set aside refund claims sanctioned by the original authority under Rule 5 of the CENVAT Credit Rules, 2004. The appellant provided Technical Services, Sales Manager Services and Corporate Key Account Management Services to Wacker Chemie AG, Germany, under separate agreements, receiving consideration in convertible foreign exchange. Refund claims aggregating ₹53,78,269 for the period 2013-14 to 2016-17 were filed under Notification No. 27/2012-C.E. (N.T.) on the basis that the Business Auxiliary Services exported without payment of service tax entitled the appellant to refund of accumulated CENVAT credit. While the original authority sanctioned ₹49,15,836 and rejected ₹4,62,433, the Commissioner (Appeals) held that the services were performed in India and treated the appellant as an intermediary under the Place of Provision of Services Rules, 2012, thereby denying the refund. Examining the agreements, the Tribunal found that the appellant was not authorised to negotiate prices, conclude contracts, or bind the overseas entity, and that the relationship was that of an independent contractor rather than principal and agent. The consideration was cost-based and not linked to sales in India. The Tribunal held that the essential ingredients of intermediary service, including involvement of three parties and separate main and ancillary supplies, were absent. Relying on Rule 6A of the Service Tax Rules, 1994, Rule 3 of the Place of Provision of Services Rules, 2012, CBIC Circular dated 20.09.2021, and various decisions of the Tribunal, the Karnataka High Court, the Bombay High Court and the Supreme Court, it held that the services were provided to the overseas entity located outside India and qualified as export of services. Consequently, the Tribunal held that the rejection of the refund claims was not legally sustainable, set aside the impugned order dated 28.10.2016, allowed the appeals with consequential relief as per law, and disposed of the miscellaneous applications.
