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TMI Blog2024 (9) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue has proceeded to order payment of an amount under Rule 6 (3A) of CCR. The amount has been computed by applying the ratio of value of so- called exempted service to the total services to the total cenvat credit availed during the period in disputed. These facts were known to the Revenue. Therefore a show cause notice dated 11.12.2019 was issued to the appellant for the period 2014-15, 2015-16 to July, 2016 by invoking extended period of limitation. The matter was adjudicated, the demand proposed in the show cause notice was confirmed. Aggrieved with the said order, the appellant is before me. 3. Heard the parties and perused the record. 4. Considering the fact that the similar issue came up before this Tribunal in the case of Cognizant Technology Solutions India Pvt.Ltd. vide Final Order No.41016 of 2024 dated 1.8.2024 in Appeal No.ST/42481 of 2016 decided in favour of the appellant wherein it has been held as under:- "21. The issue that arises for consideration is whether the demand confirmed alleging that appellant has availed common input services for taxable and exempted services (amount received from mutual funds / securities) is sustainable or not. 22. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case, the appellant has invested their income in shares / mutual funds and also sold certain investments. They have acted like any individual who would invest funds in shares / securities. The appellant is not engaged in the business of trading of shares / securities as provided under Section 105 (zzzzg) of the Act ibid. It requires to be stressed that the activity of engaging in sale and purchase of securities for another is a taxable service under Finance Act, 1994. Only a licensed person or agent can engage in doing such activity of sale and purchase of shares. The department seems to have confused purchase and sale of shares as an investment with the 'trading of goods' as a business. A manufacturer who also sells goods can be said to be engaged in trading of goods. Such manufacturer if avails common inputs / input services for manufacture of dutiable goods and for trading of goods is liable to reverse the proportionate credit as under Rule 6 (3A) or pay amount as per Rule 6 (3) (i). This is because trading is a deemed exempted service w.e.f. 01.04.2011, and no credit can be availed in respect of trading. In this scenario, trading of goods is part of the business of the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted services. Further I find 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. 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 invoking Rule 6 does not arise and I am of the view that Department has wrongly invoked the provisions of Rule 6(3) demanding the reversal of credit on the exempted services. I also find that substantial demand is time barred as during the audit, the Department entertained the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner of Central Excise & Service Tax, Salem has been challenged, wherein, the Ld. Authority has confirmed the demand being 6% of the value of exempted service. ... .... ..... 12. Insofar as first issue is concerned, we find that the appellant had invested in shares/securities that were giving dividend income but, however, we fail to understand as to what was 'service' element involved in such investment. The revenue has only fastened the liability on surmises and without there being any positive findings in this regard. It was for the revenue to prove that 'investment' itself was a service, in order to demand service tax. Rather, the first appellant authority himself has at paragraph No.14.01 observed that "... such investment would be an activity outside the definition of service, being a mere transaction in money" but, however, has concluded in the same para that activity of investment in shares and derivative trade satisfy the definition exempted services under Cenvat Credit Rules, 2004. 13. We fail to understand the logic in treating the mere 'investment' as an exempted service because, the revenue has not specifically alleged if there is any 'service' in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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