Esprit India Pvt Ltd Vs Commissioner of Central Excise (CESTAT Chandigarh)
Business Support Services to Overseas Group Company Qualify as Export, Not Intermediary Services: CESTAT Chandigarh
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, allowed the appeal filed by Esprit India Pvt. Ltd. against the Order-in-Appeal dated 20.07.2016, which had upheld rejection of its refund claims for unutilized CENVAT credit. The refund claims, amounting to ₹12,94,486 for the periods October–December 2014 and January–March 2015, were filed under Notification No. 27/2012-CE(NT) dated 18.06.2012 in respect of input services used for providing taxable services.
The appellant, an Indian subsidiary of Esprit De Corp (Far East) Limited, Hong Kong, provided various business support services to its overseas group entity under a Service Agreement dated 13.07.2012, as amended on 11.03.2013. The services included market research, gathering pricing information, inspection of goods, coordination with vendors, providing information on applicable regulations, implementing shipping instructions, logistics arrangements and ensuring compliance with Indian laws. The agreement provided that the appellant rendered these services as an independent contractor and was compensated on a cost-plus 5% mark-up basis.
The Original Authority rejected the refund claims, and the Commissioner (Appeals) upheld the rejection on the ground that the services did not qualify as export of services but constituted intermediary services. The appellant challenged this finding before the Tribunal.
