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2021 (4) TMI 687 - AT - Service TaxCENVAT Credit - exempted activity or not - trading in mutual funds - Commercial Training and Coaching Services - maintenance of separate records or not - extended period of limitation - HELD THAT:- The “trading‟ has not been defined under the Service Tax but in the context of securities, “trading‟ means an activity where a person is engaged in selling the goods and occupy for the purpose of making profit but certainly trading is different from redemption of mutual fund units, in the present case appellant cannot transfer the mutual fund units to third party and give only by redemption to the mutual fund because the appellant is not permitted to trade mutual fund unit in the absence of a license from the SEBI. There is a restriction on the right to transfer unit and the appellant cannot transfer units to any other person. The appellant cannot be termed as “service provider” because he only makes an investment in the mutual fund and earn profit from it which is shown in the Books of Accounts under the head “other income”. Hence the question of invoking Rule 6 does not arise and hence the Department has wrongly invoked the provisions of Rule 6(3) demanding the reversal of credit on the exempted services. Extended period of Limitation - HELD THAT:- The substantial demand is time-barred as during the audit, the Department entertained the view that the appellant is engaged in providing the exempted services and consequently issued the show-cause notice. The appellant has been filing the returns under the taxable service of “Commercial Training and Coaching and has provided all the records to the Department during the course of investigation and has not suppressed any material fact from the Department - the extended period cannot be invoked where the Revenue‟s case is based on Balance Sheet and income return and other records of the assessee. Appeal allowed - decided in favor of appellant.
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