Order Date – 12 January 2024

Parties: M/s. Cognizant Technology Solutions India Private Limited Vs The Principal Commissioner of GST & Central Excise, Chennai North GST Commissionerate

Facts –

• The Appellant, M/s. Cognizant Technology Solutions India Private Limited, are providers of Information Technology Software Services and Business Support Services and having a Branch Office in the United States. Appellants availed Cenvat Credit of Service Tax paid on their input services and has utilized the same for payment of Service Tax on their output services.
• A show cause notice was issued consequent to the audit alleging that 'On-site Development of Software related Services' provided to their Branch Office which are in nature of 'exempted services' in terms of Rules 2(e) and 6(8) of the Cenvat Credit Rules, 2004, hence Cenvat credit is not available to them. Further observed that they had failed to maintain separate accounts for receipt and use of input services used for providing exempted services and taxable output services.

Issue –

• Whether the appellant is liable to reverse the CENVAT credit?

Order –

• The Tribunal observed that the issue has been considered by the Tribunal in the appellant’s own case and has set aside the demand vide Final Order No. 40529/2023 dated 28.6.2023 by observing that “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.
• Further held that 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.
• After appreciating the facts, evidence and also following the decision in the appellant’s own case, the demand, interest or penalties cannot sustain and are set aside.