TMI Blog2012 (12) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case is sustainable. Further, for the same reasons, the first appellant is liable to penalty also. Cenvat credit - denial as services used for both exempted and non exempted goods - Held that:- Admittedly the first appellant was engaged in the manufacture of animal feed which is exempted and was also engaged in trading activity & was obliged by law to maintain separate records failing which reverse the credit relatable to the trading activity. In fact there is no proposal for demanding 8%/10% on the exempted goods and therefore one has to take it that it is their case that the demand is on the ground that appellant was engaged in the manufacture of excisable goods and trading of other goods. Once the assessee is considered to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of the audit of the records, it was found that the first appellant had availed credit of service tax paid on manpower supply service and security service during the period 2005-06 and 2006-07 up to January 2007 amounting to ₹ 2,28,476/-. The audit officers found that even though the invoices issued by the service providers charged service tax but no service tax was paid to the government. Subsequent investigations revealed that the premises given in the invoice and the registration number were found to be wrong and no service tax had been paid by the service providers namely M/s. Protective Security Services and M/s. Safe. Industrial Labour Services. Shri Madan Singh Rathod was the owner of both the firms. During investigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he credit taken since the show cause notice was issued in March 2009 and therefore was time barred. He also submitted that there is no evidence to show that the appellant were aware that the security firms of Shri Madan Singh Rathod were actually not paying the amount collected as service tax by him to the government. Just because the service provider did not deposit the amount of service tax to the credit of Central Government though they recovered the same from the appellants, Revenue cannot invoke extended period and recover the amount. He also submitted that for the same reason penalty cannot be imposed. 5. As regards the cenvat credit of ₹ 1 ,43,839 /- availed during the period from April 07 to October 07, he submits that avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e receiving the services from the two service providers and the service provider suddenly disappeared in the month of January 07. He also admitted that the company had not verified the existence of the service providers and service providers had come to the factory and collected the cheques. In such circumstances, it cannot be said that the appellants were not aware of the fraud played by the two service providers. He submits that if the appellants did not have any intention to suppress the facts, they would have intimated the department about the disappearance of the service providers in February 07 and made efforts to find out whether the premises which was indicated as the office of the service providers was in existence or not and wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the appellants were aware of the disappearance of the service provider after January 07. They did not effort to find out even at that stage as to whether the service providers were in existence and whether they had paid service tax collected from them to the government. It is strange that appellants received, services from a service provider whose existence they knew only because he used to come to collect the cheque and they did not even bother to verify whether the office premises in the invoice was in existence or not. As observed by the Commissioner (Appeals), the fact that the service provider was located in Vapi itself would also go against the appellants since it cannot even be their case that ascertaining the existence or otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of other goods. If that is the case in respect of trading activity, the credit attributable to trading activity, is not admissible and is required to be reversed. The principle of self assessment and submission of only the results of self assessment in the form of return would show that it is the responsibility of the assessee to assess the goods correctly and pay the taxes correctly. In this case it cannot be said that assessee was not aware that for trading activity credit is not admissible. Once the assessee is considered to be aware of statutory provisions relating to availment of credit and his activities, the normal conclusion of a ordinary prudent person is that the assessee had deliberately avoided reversing the credit attributable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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