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2013 (12) TMI 436 - AT - Service TaxAvailment of CENVAT Credit - Intellectual Property Right services - Bar of limitation - Classification of service - Held that:- discharge of service tax liability by the service provider was never disputed by the department at all. Shri Kelkar also raised invoices on the appellant, which shows the nature of the services rendered, the amount charged, the service tax liability discharged and all other relevant particulars. On the strength of these invoices, the appellant company has taken credit. Once the appellant has received the services and has borne the incidence of service tax, the appellant is rightly entitled to the service tax credit. The authorities at the service recipient's end has no jurisdiction to question the classification of service and the liability to service tax so long as the authorities having jurisdiction over the service provider's end do not dispute the same. Therefore, the impugned demand holding that the appellant has not received any input service and therefore nor eligible for any service tax credit is unsustainable in law - the entire demand is time barred. As early as in 2007, when the records of the appellant firm were audited by the department the payment of royalty to Shri Kelkar and receipt of service by the appellant was known to the department, and thereafter, on the advice of the department Shri Kelkar obtained service tax registration and discharged service tax liability. The receipt of service and availment to service tax credit was also reflected by the appellant in the monthly ER-1 returns. Therefore, the whole transaction, the payment of service tax and availment of credit thereon was in the full knowledge of the department. In spite of having the information, the show-cause notice has been issued in this case only in January 2011 after a lapse of more than 3 ½ years. Thus, the demand is clearly time barred - Decided in favour of assessee.
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