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2022 (4) TMI 369 - AT - Service TaxRefund of Service tax paid under protest - legal consultancy services received for winding up of business - applicability of Reverse Charge Mechanism - business entity or not - HELD THAT:- The term ‘business entity’ is defined under section 65B(17) to mean “any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession.” Here ordinarily means normally or in normal course. Therefore, it can be said that ‘business entity’ is a person who ordinarily carries out activity for profit. However, if any person is not carrying out any activity for profit, then the person cannot be considered as ‘business entity’. Therefore, for applicability of this definition the appellant has to normally or in normal course, indulged in any activity which is profit motivated. Merely because the appellant is still registered under the Companies Act and has not get the said registration cancelled does not mean that they are carrying out business activity. It is nowhere the case of the Revenue that the appellant is indulged into any activity relating to its business after the year 2008. The learned Commissioner has specifically recorded in the impugned order that there is no dispute that the appellant have stopped their business activity and are in the process of winding up - The appellant cannot be saddled with any tax liability only on the basis of apprehension. It is the case of the appellant, which has not been denied anywhere by revenue, that they have discharged their employees also at the time of closure of business. Profit or motive for profit is a pre-condition for application of section 65B(17) ibid, which are not available from the facts of this case. Submission of learned Authorised Representative is that after so many years of winding up or/ closure of business the appellant are availing legal consultancy services which raises suspicion - HELD THAT:- The same is also without any basis as no evidence has been placed on record by the department to substantiate it nor it is the case of the department anywhere in the show cause notice or before the authorities below. Appeal allowed - decided in favor of appellant.
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