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TMI Blog2022 (4) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are entitled for the refund claim of Service Tax paid by them under protest under Reverse Charge Mechanism for the legal consultancy services received by them for winding up of their business? 3. The appellant herein were into Business Auxillary Services, Management or Business Consultancy Services etc. and were paying Service Tax under Reverse Charge Mechanism for the legal consultancy service. Their ultimate holding i.e. Lehman Brothers holding Inc. USA filed a petition for bankruptcy in US in September, 2008 and Lehman Brothers Investment Pte. Ltd. Singapore, the immediate holding company was placed into creditors voluntary liquidation. Subsequently, the appellant entered into an international Asset Sale Agreement dated 29.09.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 is not applicable to them as the exemption has been granted for service provided by an individual or an advocate or a partnership firm of advocates by way of legal services to any person other than business entity . On appeal filed by the appellant, the Appellate Authority vide impugned order dated 06/07/2018 rejected the same after recording the finding that the appellant falls under preview of definition of business entity as defined under section 65B(17) of the Finance Act 1994. They were business entity at the time of receiving Legal Services from their domestic vendors and will remain the same till they are registered under the Companies Act, 1956 and therefore the exemption notification (supra) is not applicable to them. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Reverse Charge Mechanism for legal consultancy services received from domestic vendors. In support of his submission learned Counsel place reliance on the decision of Hon ble Supreme Court in the matter of Vijaya Laxmi Sugar Mills v/s CIT; AIR 1991 SC 2042 in which the Hon ble Supreme Court has laid down that the activity undertaken in the course of winding up is not an activity for furtherance of any business carried on by the company before its winding up and the legal expenses incurred are not for the purpose of furtherance of business but in relation to closure of business. Hence the refund claimed is liable to be allowed. Similar views have been taken by the Hon ble Supreme Court in the matter of Liquidators of Pursa Limited v/s CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is a business entity ? 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. 7. Merely because the appellant is still registered under the Companies Act and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. So far as the submission of learned Authorised Representative that after so many years of winding up or/ closure of business the appellant are availing legal consultancy services which raises suspicion, is concerned 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. The decisions cited by learned Counsel also supports the case of the appellant. 8. In view of the discussions made herein above, I am of the considered view that the impugned order is liable to be set aside. Accordingly, the appeal is allowed with consequential relief, if any. (Pronounced in open Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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