Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 62 - AT - Service TaxExport of service in terms of Rule 6A of the Service Tax Rules, 1994 - service rendered in the US was rendered by the appellant or by their overseas branch or not - demand at 6% of the value of alleged exempt services without giving an option as provided under Rule 6(3)(ii) of CENVAT Credit Rules, 2004 - unit has been audited in the past and no discrepancy noticed - extended period of limitation - HELD THAT:- It is seen from the Income Tax returns in Form 3CEB for the Financial Year 2012 – 13, that ‘Cognizant Technology Solutions India Private Limited US branch’ is carrying out ‘on-site development of software related services’. At para 13 of the return ‘particulars in respect of providing of services’ is reported. The appellant has responded with a ‘Yes’ to having entered into international transactions in respect of services. The dispute is about the amounts received from the branch shown under the ‘On-site development of software related services’ in the books of account of CTS. It is found that this issue stated in the findings of the impugned order is a secondary one. The main issue before the lower authority stems from whether the service rendered in the USA as seen in the Income Tax Return was rendered by the appellant to its overseas branch as alleged in the SCN. It has been satisfactorily demonstrated by the appellant that it was CTS USA who has rendered service to their associated enterprise in USA and received the payment for it in USA for the amount declared in the Income Tax Form 3CEB. There is no allegation in the Show Cause Notice that CTS USA was only a front company for services rendered by CTS India in the USA. This being so no taxable service has been rendered by CTS India in USA with respect to the impugned figures disclosed in their Income Tax Form 3CEB for the Financial Year 2012 – 13 and 2013 – 14. This entry was the trigger for the allegations in the show cause notice that culminated in the impugned order. Once no service was rendered by the appellant in USA, which is exigible to tax under the Finance Act 1994, all charges under the said Act against the appellant must fail. The judgment of the Hon’ble High Court in LINDE ENGINEERING INDIA PVT. LTD. VERSUS UNION OF INDIA [2020 (8) TMI 181 - GUJARAT HIGH COURT] pertains to a case where Linde India was providing service to its parent company Linde Germany. The facts in this case show that CTS USA and not CTS India which was supplying services and that too to a foreign customer and hence the facts are distinguished and do not support Revenue’s stand. Since the matter is decided in favor of the appellant on merits, the judgments cited by them are not discussed. The main charge against the appellant fails on merits. This being so, the other issues relating to CENVAT credit and the extended time limit also do not survive - Appeal allowed.
|