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TMI Blog2021 (4) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the appellant‟s records by the Audit wing of the Department involving the period from 2012-2017, it was observed that for the period involving 2014-2015, 2015-16 2016-17, the appellant has declared Profit on sale of Mutual fund investments involving amounts of ₹ 16,60,045/- (Rupees Sixteen Lakhs Sixty Thousand and Forty Five only), ₹ 36,82,138/- (Rupees Thirty Six Lakhs Eighty Two Thousand One Hundred and Thirty Eight only) and ₹ 57,04,645/- (Rupees Fifty Seven Lakhs Four Thousand Six Hundred and Forty Five only) respectively aggregating to ₹ 1,10,46,828/- (Rupees One Crore Ten Lakhs Forty Six Thousand Eight Hundred and Twenty Eight only). Further the Department observed that the appellant is engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Vs. CIT 1959 (35) ITR 594 (S.C) which deals with Income Tax on sale of plots. He further submitted that adjudicating authority has completely ignored the fundamental principle that in order to levy service tax there should be a service provider and a service receiver and in the present case, the appellant cannot be termed as service provider‟. He further submitted that an investor who invested in mutual funds units cannot be designated as a service provider either at the time of forwarding money for investment or for that matter at the time of encashing investment by returning the same units to the fund. He further submitted that the adjudicating authority has wrongly relied upon the decision of authority for Advance Rulings in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment has wrongly invoked the extended period of limitation and the substantial demand is barred by limitation. He further submits that the period in dispute is from 2014-15 to 2015-16 and 2016-17 and the show-cause notice was issued on 15/06/2018 which is substantially time-barred. He further submitted that suppression cannot be alleged as the appellant has been regularly filing returns and has provided all the information and the records during the audit and the show-cause notice is the outcome of an audit by the Department and hence extended period cannot be invoked. For this submission, learned consultant relied upon the following decisions: Anand Nishikawa Co. Ltd. Vs. CCE, Meerut 2005 (188) E.L.T. 149 (SC) Amco Batteri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson 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. Further I find that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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