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Seafarer's Recruitment Service Provider Is Not An intermediary: CESTAT Allows CENVAT Credit Refund
Mariya Paliwala
27 July 2022 1:00 PM IST
The Mumbai bench of the Customs, Excise and Appellate Tribunal (CESTAT) consisting of Dr. Suvendu Kumar Pati (Judicial Member) has held that a seafarer's recruitment service provider, who processes the entire selection, medical test, insurance, transportation, training, etc. to the overseas client and receives convertible foreign exchange, is not an intermediary. The appellant/assessee...
The Mumbai bench of the Customs, Excise and Appellate Tribunal (CESTAT) consisting of Dr. Suvendu Kumar Pati (Judicial Member) has held that a seafarer's recruitment service provider, who processes the entire selection, medical test, insurance, transportation, training, etc. to the overseas client and receives convertible foreign exchange, is not an intermediary.
The appellant/assessee is engaged in providing ship management services involving crew management to its foreign associated company based in Hong Kong. The service recipient has been appointed by foreign vessel owners for their ship management activities.
The appellant sought a refund of its accumulated CENVAT credit from October, 2016 to June, 2017 as per the provision contained in Notification No. 27/2012-CE (NT) dated 18.06.2012. It was rejected by an adjudication order on the grounds that the appellant's services were intermediary services, and their export would be subject to Rule 9(c) of the POPS Rules, 2002, because the place of provision of service would be considered India for such an intermediary. The adjudication order was approved by the Commissioner of CGST & Central Excise (Appeals-II), Mumbai, before whom the appellant had filed an appeal.
The appellant submitted that the appellant is an independent company registered in India. It has provided an independent service for the recruitment of ship crew members to its foreign associate, who is undertaking the whole management of ships for different ship owners. The seafarers' recruitment services are not intermediary services to deny the benefits of Notification No. 27/2012-CE (NT).
The appellant contended that the contract was executed between two principals and not even a principal and its agent/broker or intermediary, as enumerated in Rule 2(f) of the POPS Rules, 2012. The order passed by the Commissioner (Appeals) is unsustainable in law and is required to be set aside.
The CESTAT stated that the claim that AETM (Hang Kong) Ltd. outsourced crew management services to the Appellant is incorrect. In reality, it recruited trained crew members from the Appellant at its request and hired them into its own company to provide crew management services to ship owners.
The CESTAT has held that the appellant is entitled to get the refund of CENVAT credit for the period from October, 2016 to June, 2017 along with applicable interest. The department is directed to pay the amount within two months.
Case Title: M/s Anglo Eastern Maritime Services Pvt. Ltd. Versus Commissioner of CGST
Citation: Service Tax Appeal No. 86988 of 2019
Dated: 30.06.2022
Counsel For Appellant: C.A. Vasant Bhat
Counsel For Respondent: Assistant Commissioner, Authorised Representative Onil Shivadikar
