Classification of service— In the instant case, the applicant, seeking an advance ruling in respect of the following question— 

Whether the activity of design and development of patterns used for manufacturing of camshafts, for a customer is a composite supply, the principal supply being supply of services?

The applicant is a manufacturer of camshafts and sells the same in domestic market as well as overseas market. This application is not pertaining to the manufacture and Sale of the said camshafts.

In the subject case the main supply would be supply of tools and patterns to the overseas customers by the third party vendors, which is not actually happening physically since the tools and patterns are moving from the third party vendors directly to the applicant. Such movement of goods to the applicant appears to be on behalf of the overseas vendors because the ownership of the tools and patterns is with such overseas vendors as submitted by the applicant.

Secondly the ancillary supply would be the supply of designs and drawings of the patterns and tools by the applicant, on behalf of the overseas customers to third party vendor/s and also the activity of identifying the third party vendors who can manufacture the pattern and tools as per the design/drawings (requirements) and explaining and closely working and engaging with such third party manufacturer to develop the patterns and tools. Further, it is very clear from the applicant's submissions that they are not providing any services on its own account. The designs are provided to the third party vendors on behalf of the overseas customers of the applicant. The service provided by them is to their overseas customers and as per the requirements and directions of its overseas principals.

 Held that— The activity of design and development of patterns used for manufacturing of camshafts, for a customer is a supply of service in the form of intermediary services.