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TMI Blog2013 (12) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax credit on Intellectual Property Right (IPR) services during September 2007 to July 2008 on such services provided by Shri. G.D. Kelkar, the Managing Director of the appellant's firm to the appellant. Revenue was of the view that services rendered by Shri G.D.Kelkar, who is an employee to the appellant firm, cannot be considered as a service rendered and therefore, no credit can be taken of the service tax paid on such IPR services. A statement of Shri.R.Rajangam, Chief Financial Officer of the company recorded under Section 14 of the Central Excise Act, also revealed that Shri G.D.Kelkar, as a Managing Director, was an employee of the company and was using the laboratory facilities of the company and the raw materials provided b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the provisions of Section 34 of the Central Excise Act, 1944. Aggrieved of the same, the appellant is before us. 3. The Ld. Counsel for the appellant made the following submissions. 3.1 In April 2007 the Central Excise authorities conducted audit of the appellant's records and enquired about the royalty payments made to Shri G.D.Kelkar. The appellant explained that the royalty was paid to Shri G. D. Kelkar as per the decision of the Board of Directors of the company, inasmuchas Shri G.D. Kelkar had developed certain formulas and processes useful for the manufacture of the products by the appellant company. The department informed the appellant that the royalty payment attracted liability to service tax. Vide letter dated 26/06/2007 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the strength of these invoices, the appellant took credit of the service tax paid on the IPR services received by them from Shri Kelkar. Therefore, the entire transactions were undertaken in accordance with the law with the full knowledge of the department. The payment of service tax by Kelkar has not been disputed by the department and has been accepted by the department. If that be so, the department cannot take the stand that the appellant did not receive any services and the credit taken by the services paid on IPR services is not an eligible credit. The Ld. Counsel contends that the taxability and the related issues of input service has to be decided by the departmental authorities having jurisdiction over the service provider and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no dispute was raised on the assessment returns filed by Shri Kelkar. 5.2 In other words, the 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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