when payment of ST has been accepted by department without dispute, department cannot take a stand that no Input services were received by the appellant

 

S H KELKAR & CO PVT LTD Vs CCE, (Mumbai – CESTAT) (2013-TIOL-1684-CESTAT-MUM)

Facts of case:

The appellant, M/s. S.H.Kelkar & Co. Pvt. Ltd., Mumbai, are manufactures of fragrances and aroma chemicals. It appears that the appellant availed service tax credit on Intellectual Property Right (IPR) services 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. Since the appellant had utilised the Cenvat Credit and cleared excisable goods, it was proposed to hold that the goods cleared by utilizing wrongly availed credit is liable to confiscation. The impugned order was passed wherein Cenvat Credit was denied.

Held:

MD has discharged the service tax liability on IPR services on the royalty received by him from the appellant company. MD has also took registration and discharged the duty liability and also filed returns assessing the liability to service tax. The payments made by MD was accepted by the department and no dispute was raised on the assessment returns filed by MD. So when payment of ST has been accepted by department without dispute, Revenue cannot now take a stand that no Input services were received by the appellant. Hence, the impugned order set aside and the appeal is allowed.