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Case Law Details

Case Name : CSG Systems International (India) Pvt Ltd. Vs Commissioner of Central Tax Bengaluru South Commissionerate (CESTAT Bangalore)
Appeal Number : Service Tax Appeal No. 20186 of 2020
Date of Judgement/Order : 29/03/2021
Related Assessment Year :
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CSG Systems International (India) Pvt Ltd. Vs Commissioner of Central Tax Bengaluru South Commissionerate (CESTAT Bangalore)

I find that when the show-cause notice dt. 28/03/2014 was issued when the appellant filed the refund claim and the grounds raised in the show-cause notice was lack of nexus, claim is time barred and lack of documentation or discrepancies in documents; whereas when the Order-in-Original dt. 16/01/2018 was passed, the original authority travelled beyond the show-cause notice and came to a finding that the sales, marketing and administrative services are classified as BAS provided in India and hence Rule 6A not fulfilled and the appellant is acting as an intermediary. When the appeal filed against the said order, Commissioner(Appeals) remanded the matter and directed the original authority to reconsider the matter in the light of his earlier Order-in-Appeal No.728 to 730/2017 dt. 13/07/2017. But unfortunately on remand, the original authority vide Order-in-Original dt. 21/12/2018 did not consider the directions of the appellate authority and again came to the conclusion that the BAS provided by the appellant to its group companies outside India would be considered as intermediary services and cannot be treated as export of service. The appellant again filed an appeal against the said order and vide the impugned order Commissioner(Appeals) has rejected the appeal and upheld the order of the original authority holding that the BAS are intermediary services. Further after analyzing the show-cause notice and the various orders, I find that the first Order-in-Original, remand Order-in-Original and the impugned order, all have travelled beyond the show- cause notice because in the show-cause notice, there is no allegation regarding the intermediary service which has been upheld by both the authorities by ignoring the earlier direction of the remand order passed by the Commissioner(Appeals).

The learned counsel cited the decision of the Hon’ble Supreme Court in the case of Brindavan Beverages (P) Ltd. and other decisions, wherein it has been consistently held that the show-cause notice is the foundation of any demand and any order passed beyond the show-cause notice is not legally permissible and only on this ground, the impugned order can be set aside and I hold that the impugned order is beyond the show-cause notice and therefore bad in law.

Further as far as merit is concerned, even the appellant has proved by referring to Master Service Agreement that the sales marketing and support services provided to its group companies are export of service because the said services have been provided on principal to principal basis and there is no element of principal-agent relationship. Further, I find that the Commissioner(Appeals) has selectively picked up the clauses in the Master Agreement without analyzing the agreement as a whole which is also bad in law as held by the Supreme Court in the case of Super Poly Fabriks Ltd. cited supra. Further I find that the appellant has satisfied all the six conditions of Rule 6A which proves that these services rendered by them are export of service.


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July 2024